2023 Is When The Rubber Meets The Road For The Oil Market

With 2022 coming to an end soon, oil bulls and bears alike can't help but reflect on the tale of two halves. The first half of the year can be best described as nothing but bullish with a dash of fear sprinkled in here and there. While the second half of the year can be best described as frustrating, conflicting, and confusing. 

In my view, 2023 is the year when rubber meets the road. In 2023, we have will have:

• A slowing global economy

• No more SPR releases (for now, no midterm elections)

• No more China-related COVID lockdowns

It may very well be the first year since COVID started in 2020 that we have a normalized market environment. Without the SPR releases and the arbitrary demand suppression, the global oil market will show its true colors to everyone. This will also come at a time when the world finally gets to witness just what happens when you underspend upstream capex for 6 years straight (2015 - 2021). 

While oil bulls firmly understand this argument, 2023 is when the rubber meets the road, and non-OPEC ex-US declines will start to mount. 

How will we be able to validate this through data?