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The monthly outlook reports of the three major institutions in August were released. This month's adjustments to the balance sheet within two years were slightly negative, mainly focusing on forward demand. The general optimism continued to decline, and it was acknowledged that the growth in the first half of the peak season was lower than expected. However, there is no concern about significant oversupply in the long term, and the overall oil market will remain balanced.

Figure 1: World supply and demand expectations from the three major monthly reports

Data source: EIA, OPEC, IEA monthly reports, compiled by COFCO Futures Research Institute

First of all, from the perspective of global supply and demand, the EIA has not made much adjustment to this year's demand, and the focus is on lowering the demand forecast for next year. However, because the total supply has also been lowered, looking at the whole year of this year and next year, it is expected that the global supply-demand ratio will still be negative, that is, there will still be some supply gaps, showing a tight balance.

The IEA slightly lowered its forecast for next year's demand, but kept its outlook for this year unchanged, and maintained its view on demand. However, it pointed out in its monthly report that the potential pressure of global inventory accumulation lies in OPEC+'s production cut plan, suggesting that if OPEC+ increases production in the fourth quarter, the world will face oversupply and inventory accumulation.

What is more obvious is that OPEC's monthly report has continued to maintain its unique optimistic judgment until now, and has also begun to lower the demand growth rate. It said that the main reason for the decline was that China's actual demand in the summer was weaker than expected, that is, demand has declined, but confidence in the long-term outlook remains. However, OPEC's adjustment also means that the market's outlook for the peak season in the first half of the year has been constantly questioned, which is the reason for the cooling of sentiment since mid-July.