Prices fall slightly, but market fundamentals remain tight

Oil prices are retreating, but Brent 1st-nearby was still above $93/b yesterday. It is back to $91/b, mainly due to the widespread correction in risky assets after the surge in the US inflation rate and the very hawkish comments of a Fed member (see Daily Eco on this subject). The progress of the Iranian nuclear talks and the likely willingness of the Biden administration to bring Iranian oil back into the market to help ease prices is another moderating factor.

That said, OPEC highlighted the upside risks to its global oil demand forecast (+4.2mb/d in 2022) in its monthly report yesterday. On the other hand, according to OPEC figures, its production increased by only 64kb/d in January, while the OPEC+ agreement forecast a 250kb/d increase).

In Asia, we are witnessing a rise in trucker protests in several countries (Thailand, Bangladesh, Indonesia) due to the surge in diesel prices which is causing them to work at a loss. The situation in India is also very tense. This can only reinforce supply problems and inflationary pressures.