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WHY IS OIL BACK TO $90 A BARREK

* WTI Crude oil prices surge to a 10 month high and are back to above $90 a barrel

* Push by Saudi Arabia and Russia to restrict supply has also removed barrels from the market, depleting oil stocks

* Saudi Arabia’s oil output likely to remain at 9Mbpd until end of December, 25% lower than its maximum capacity of 12mbpd

* World oil demand is expected to grow by a healthy 2.2Mbpd, unchanged from previous assessment, during 2024

* Resurgence in Chinese consumption, along with rise in jet fuel demand and petrochemical feedstock's is fuelling growth

* World supply in 2023 is forecasted to rise moderately by 1.5 mb/d, with the US, Iran and Brazil top sources of growth

* OPEC+ output has fallen by 2 mb/d with overall losses moderated by sharply higher Iranian flows

* Global oil inventories are expected to fall by 0.2 Mb/d in Q42023, on back of recent production cuts

* Refinery margins hit an eight-month high, as refiners struggled to keep up with oil demand growth, especially for middle distillates

* Product cracks and margins reached near-record levels due to unplanned outages, feedstock quality issues, supply chain bottlenecks and low stocks

WORLD ECONOMY

* Various Challenges still ahead of us: High inflation, elevated interest rates and geo-political tensions

* China – disappointment still there yet stronger-than-anticipated growth trend in China, supported by further fiscal and monetary stimulus, may provide additional support to global economic growth

* The ongoing global economic growth is forecast to drive oil demand, especially given the recovery in tourism, air travel and steady driving mobility

* Euro-zone’s economy continues to be impacted by ongoing high inflation, fallout from the ECB’s consequent monetary policy and the recent decline in industrial activity

WORLD DEMAND LARGE DEFICIT

* World oil demand remains on track to grow by 2.2mbpd in 2023 to 101.8mbpd, led by resurgent Chinese consumption, strong summer air travel along with increased oil use in power generation and surging Chinese petrochemical activity.

* In 2024, solid global economic growth, amid continued improvements in China, is expected to further boost oil consumption

* Pre-COVID-19 levels of total global oil demand will be surpassed in 2023 to average at 102.1 mb/d and rise further to 104.3 mb/d in 2024, 2.4 mb/d y-o-y in 2023 to 104.3Mb/d and 2.2 mb/d in 2024

* In OECD, oil demand is expected to rise by 0.26 mb/d to average 46.4 mb/d. US oil demand is forecast to exceed pre-pandemic levels at 20.7 mb/d, mainly due to recovery in jet fuel and improvements in gasoline and light distillate demand

* This is due to expectations for slower economic activity in the two regions and ongoing supply chain bottlenecks that would weigh on industrial activity, particularly in OECD Europe

* In the non-OECD, oil demand in 2024 is forecast to increase by almost 2.0 mb/d YoY to average 57.9 mb/d. China and India are expected to see the largest growth

* Refinery margins hit an eight-month high as refiners struggled to keep up with oil demand growth, especially for middle distillates

* Global refinery runs are forecast to rise by 1.7 mb/d to 82.4 mb/d in 2023 and by 1.2 mb/d to 83.6 mb/d next year

* Other regions, particularly Middle East and Other Asia, are also set to see considerable gains, supported by positive economic outlook.

* In terms of fuels, jet kerosene, gasoline and diesel are assumed to lead non-OECD oil demand growth in 2024