The price of Brent crude ended the week at $86.39 after closing the previous week at 79.94. The price of WTI ended the week at $79.72 after closing the previous week at $73.39.

Crude prices were boosted at the end of the week with Russia announcing on Friday a reduction of 500,000 b/d starting in March. While there is some uncertainty if Russia consulted with other members of OPEC+, it appears that the other members will not take any immediate action in response to Russia’s production cut. The announced production cut is consistent with our current short-term forecast, which includes a reduction of 670,000 b/d in 1Q 2023 in comparison to 1Q2022 and an average reduction of 460,000 b/d in 2023 compared to 2022.

In our latest quarterly update of our global outlook for the oil markets, we are forecasting that global oil demand in 1Q will be 1.54 million b/d more than in 1Q22.  During 2023 we are forecasting that global oil demand will increase by 2.11 million b/d in comparison to 2022.

The following is the regional breakdown for oil demand growth in 2023 in comparison to 2022:

• Africa demand will increase by 0.17 million b/d
• Asia demand will increase by 1.81 million b/d in comparison with 2022 (with China’s demand increasing by 0.75 million b/d)
• Russia and CIS demand will decrease by 0.14 million b/d
• Europe demand will decrease by 0.07 million b/d
• Latin America demand will increase by 0.14 million b/d
• Middle East demand will increase by 0.15 million b/d
• North America demand will increase by 0.06 million b/d

With our forecasted demand and supply, the market will be in slight surplus during 2023. We are forecasting that price of Brent crude will average $87.70 in 1Q of 2023 and $91.40 in 2Q of 2023.

For a complete forecast of refined products and prices, please refer to our Short-term Outlook