The Negative Fundamentals For Oil Are Now Reversing. Higher oil Prices In 2023? AIA Weekly 12-17-22

The fundamentals in the oil market that were causing weakness in
the oil market over the last six months now appear to be
reversing and becoming tailwinds. 


 -Chinese economy opening up from three years of zero Covid
policy. This could result in 2-3 million barrels of demand. 


-SPR releases ending. Biden administration now announcing refills
of SPR. 1 million barrels per day of supply off the market. 


-Russian supply was juiced due to get ahead of sanctions earlier
this month. 500-800k of supply off the market. 


-The continued reluctance of producers to spend money on new
production and development due to negative policies including
windfall profit taxes being imposed by governments. 


-Strong demand from emerging markets like India.  


The economy in the US and EU are now entering recessions. How
much will this contribute to demand destruction?   If
the world does not experience a GFC or Covid lockdown economic
scenario, there is a good chance oil prices continue moving
higher next year.