Looking back, 2022 was an eventful year for the oil market. Martijn Rats, Morgan Stanley's Global Commodity Strategist, discusses some of the key uncertainties that the global oil market will likely face in 2023.

Oil market to return to balance in the second quarter

“Counting barrels of supply and demand suggests that the first quarter will still be modestly oversupplied. Also, declining GDP expectations, falling PMIs and central bank tightening are still weighing heavily on the oil market today. Eventually, however, we see a more constructive outlook emerging, say from the spring onwards.”

“We expect the oil market to return to balance in the second quarter, and be undersupplied in the second half of this year. With a limited supply buffer only, we think Brent will return to over $100 a barrel by the middle of the year.”