So much for demand destruction: The global energy crunch isn’t ending
anytime soon if the International Energy Agency’s (IEA) latest
outlook is anything to go by. Despite a growing chorus of voices warning of
recession in some of the world’s largest economies, the energy think tank is
forecasting global oil demand to surpass pre-pandemic levels next year as the
Chinese economy bounces back from covid lockdowns. Supply will “struggle” to
meet the step up in demand, which will rise 2% to 101.6 mn bbl/day, the IEA
said in its latest
monthly report.

Supply will also head in the wrong direction as embargoes and
sanctions on Russian hydrocarbons and falling output in producers outside the
Middle East cancel out supply growth elsewhere. “Global oil supply may
struggle to keep pace with demand next year, as tighter sanctions force Russia
to shut in more wells and a number of producers bump up against capacity
constraints,” the IEA said.

No relief: Oil prices won’t be heading lower in 2023 should
the IEA’s forecast come to pass. Prices have already surged to near-record
highs this year in response to the war in Ukraine, and a widening in the
supply-demand gap will only put more pressure on global benchmarks.

The silver lining: This isn’t a consensus view. OPEC sources
said this week
that demand growth could slow in 2023 as surging inflation weighs on the
global economy.

Also worth noting:

  • Russia is raking in the oil money: Russian oil revenues
    jumped to around USD 20 bn last month, up 11% from April, as heightened oil
    prices offset falling export volumes. (Bloomberg)
  • Oman wants in the Gulf IPO boom: Oman is considering IPOing two units of state-owned energy firm OQ and a
    manufacturing company under a plan by the country’s investment authority to
    exit state assets. This could be the biggest listing in the country since
    2010 if it goes ahead. (Bloomberg)

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THE CLOSING BELL-

The EGX30 fell 0.1% at yesterday’s close on turnover of EGP
813 mn (3.2% above the 90-day average). Foreign investors were net sellers.
The index is down 16.6% YTD.

In the green: Madinet Nasr Housing (+7.3%), Qalaa Holdings
(+4.2%) and Heliopolis Housing (+3.5%).

In the red: Cleopatra Hospitals (-4.8%), EFG Hermes (-2.2%)
and Eastern Company (-2.0%).

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