A forecast from the Dallas Federal Reserve Bank says expectations for oil consumption growth have been reduced by deteriorating global economic conditions.
The Bank cited the decision by OPEC+to cut production quotas in November as one of the conditions, but also determined it was likely to be muted by underproduction of member countries.
Inventories in the Organization for Economic Cooperation and Development (OECD) are near record lows and are projected to remain low said the Bank forecast. Thus, while futures imply further easing in oil prices over the next year, recent data imply that the physical market remains tight, with little in the way of a buffer against further negative supply shocks.
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