Saudi Energy Minister Abdulaziz: The current OPEC+ deal continues to the end of 2023

Following earlier rumors, Saudi Energy Minister Abdulaziz bin Salman Al-Saud said the current OPEC+ deal continues to the end of 2023.

Key notes

The current cut of 2 million bpd will be maintained until the end of 2023.

If additional measures are required to balance supply and demand, we will be ready to intervene.

Energy market update

Meanwhile, a sour note amid growing fears that China could reinstate its strict zero-COVID policy has weighed on risk appetite at the start of the week. Due to the rising infections in China,  Goldman Sachs has slashed its forecast for Brent crude oil prices in the fourth quarter to US$100 per barrel from its prior US$110 estimate.

"China's Covid cases are at Apr-22 highs, yet, the new policy reaction function is unknown. However, the logic of exponential virus spread, means further lockdowns will likely be required, if full reopening is not feasible. Therefore, we cautiously lower our expectations for China demand by 1.2 mb/d in 4Q22, equivalent to the effective cut recently implemented by OPEC+, the group's first successful preemptive curtailment," the investment bank explained.

"The net impact is a c.1.5 mb/d loosening of 4Q22 balances, lowering our 4Q22 Brent forecasts by $10/bbl, to $100/bbl. Markets have instead priced a c.2 mb/d softening over the next 3 months, as these fundamental developments occurred during a seasonally low liquidity period."