At The End Of The Day, It's Just All About Oil Demand

If you want to sum up the 2023 oil thesis into one word, it would be demand. If you have clients asking you why oil is going up or down, just use demand as the explaining variable. Because no matter how you slice and dice the global oil supply & demand balance this year, demand is the only variable that can significantly move the needle.

For those of you that have not had the chance to read our write-up titled, "The oil bull thesis in numbers." Please do so now as it shares the supply & demand assumptions in that report.

After diving through IEA's latest oil market report in detail, there's a very important section we think readers should read through carefully.

First, here's IEA's assumption on global oil supply & demand for this year:

Source: IEA

As you can see, demand is set to materially outpace supplies in H2 2023. That's because 1) there are no supply surprises this year and 2) the probability of supplies disappointing to the downside is greater (Russia, for example).