{"id":60016,"date":"2021-10-20T14:00:17","date_gmt":"2021-10-20T19:00:17","guid":{"rendered":"https:\/\/olduvai.ca\/?p=60016"},"modified":"2021-10-20T14:00:17","modified_gmt":"2021-10-20T19:00:17","slug":"one-bank-crunches-the-numbers-on-oil-supply-demand-dynamics-reaches-a-shocking-conclusion","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=60016","title":{"rendered":"One Bank Crunches The Numbers On Oil Supply\/Demand Dynamics, Reaches A Shocking Conclusion"},"content":{"rendered":"
\n

One Bank Crunches The Numbers On Oil Supply\/Demand Dynamics, Reaches A Shocking Conclusion<\/a><\/h3>\n<\/header>\n
\n
\n

With oil prices surging amid a broader global energy crisis, many are hoping that this particular price spike is truly transitory as incremental supply – whether from OPEC+ or shale – kicks in and resets the market lower.<\/p>\n

But maybe not so fast: as Morgan Stanley’s chief commodity strategist Martijn Rats writes, on current trends,\u00a0global oil supply is likely to peak even earlier than demand.\u00a0<\/strong>And as prices search for the level at which demand erosion kicks in, he is increasing his Q1 2022 Brent forecast to $95\/bbl, while\u00a0also\u00a0<\/strong><\/em>lifting his long-term forecast from $60 to $70\/bbl.<\/p>\n

As hinted by the bold text above, the note from the Morgan Stanley commodity strategist (available to\u00a0pro zero hedge subs in the usual place<\/a>) focuses on arguably the two key drivers in the oil market: peak demand and peak supply. As Rats explains, while tThe planet puts boundaries on the amount of carbon that can safely be emitted – and therefore, oil consumption needs to peak – this is such a well-telegraphed prospect that it has solicited its own counter-response already:\u00a0low investment (especially in conjunction with ESG pressures to curb fossil fuels).\u00a0<\/strong>The question has therefore become:\u00a0which will actually peak first? Supply? Or demand?<\/strong><\/p>\n

\n