A note via ANZ (this in brief) is a good summary of where oil is at:
The European ban on Russian oil is expected to tighten the market further, even without a strong rebound in demand from China.
Inventories continue to fall in most major consuming nations
The lack of response from oil producers to the tightness in oil market was reflected by EIA data that showed they spent only USD244bn on exploration and development in 2021. This is 28% below the average over the five years before the pandemic. The lack of investment is also a reason why OPEC has struggled to raise output even as it’s raised its quotas by 400kb/d per month under its production agreement.
Adding further pressure in the physical market is a plunge in Libyan output. A political crisis is leading to a shutdown of ports and fields, according to Oil Minister, Mohamed Oun. Production has fallen to only 100kb/d, compared with 1.2mb/d last year.
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(ps. That news out Libya is here from yesterday: Libya government says its losing 1.1mn barrels of oil output every day)
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Oil price update: