9 November 2021

Equities & Commodities

Oil market outlook Global

Spare capacity diminishing; raising price forecasts

 Coal and gas price spikes add to incremental oil demand,

while US supply response is hitting constraints
 Spare capacity could become increasingly scarce and
concentrated as we move through 2022
 Raising longer-term forecast from USD65/b Brent to
USD75/b
We are raising Brent price forecasts for 2022 and beyond from USD65/b flat
real to USD75/b, for several reasons:
 Demand: Near-term demand is being boosted by ~0.5mbd from fuel switching. HSBC OIL AND GAS PRICE ASSUMPTIONS
Despite ongoing uncertainty over COVID-19 case numbers, the underlying
demand recovery is also strong. We now expect 2022 demand to be fully back to Annual average 2020 2021e 2022e 2023e
2019 levels, before jet demand is anywhere near back to normal again. Brent1 43.3 71.4 75.0 76.5
Previous 68.4 65.0 66.3
 US supply growth is resuming, but its price elasticity is lower than we had Change 3.0 10.0 10.2
WTI1 39.5 68.5 72.0 73.5
expected. Activity is being hampered by manpower constraints, while spending Previous 65.5 62.0 63.3
beyond the private producers remains tightly reined in. Nevertheless, we could Change 3.0 10.0 10.2
still see 1mbd of US supply growth in 2022. Conventional non-OPEC supply Quarterly average Q321 Q421e Q122e Q222e
should just about recover to 2019 levels, but the outlook beyond 2022-23 is one Brent1 73.2 82.0 75.0 75.0
Previous 70.0 65.0 65.0
of gradual decline, pointing to the need for a steady rise in OPEC supply.
Change 12.0 10.0 10.0
 We are increasingly concerned about the outlook for global spare capacity on a WTI1 70.6 79.0 72.0 72.0
Previous 67.0 62.0 62.0
1-2-year view. We don’t see room for OPEC+ to unwind all its cuts next year or
Note: 1 = USD/b
indeed in 2023, but we’re not sure that matters. Baseline supply allocations are Source: Refinitiv Datastream, HSBC estimates
becoming irrelevant – what really matters is spare capacity, and that will become
much more limited and concentrated. Some OPEC+ producers already have no
Gordon Gray*
spare capacity; within the next year, the total could fall to ~3mbd or less, with Global Head of Oil and Gas Equity Research
70% of this in just two producers – Saudi Arabia and the UAE. HSBC Bank plc
gordon.gray@hsbcib.com
 +44 20 7991 6787
With Brent in the mid-USD80/b’s, we think the bias of short-term price risk is to
the downside. The two recent OPEC+ decisions not to raise monthly supply by Charles Swabey*
Analyst
more than the planned 0.4mbd reflect its concerns over seasonally weaker HSBC Bank plc
charles.swabey@hsbc.com
demand in 1Q22, which risk pushing the market into oversupply. Meanwhile, the +44 20 3268 3954
lack of higher OPEC+ supply may well push the US to release crude from its Kim Fustier*
600mb Strategic Reserve, which could help ease conditions. The upside risk to Analyst, Oil & Gas
HSBC Bank plc
US prices from crude stocks at Cushing, Oklahoma (where WTI contracts are kim.fustier@hsbc.com
settled) approaching minimum operating levels looks to be receding. +44 20 3359 2136

 Overall, the oil market looks like it will remain fundamentally tight for some while.
* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is
For the last 18 months this tightness has come from OPEC+ discipline not registered/ qualified pursuant to FINRA regulations
outweighing demand weakness, but over the coming year the focus could begin
to shift to capacity scarcity. While the long-term demand outlook is highly
uncertain as a result of the energy transition, near-term demand prospects are
strong; for the next few years it looks like there’s greater uncertainty over supply-
side prospects than over demand

Disclosures & Disclaimer Issuer of report: HSBC Bank plc

This report must be read with the disclosures and the analyst certifications in
View HSBC Global Research at:
the Disclosure appendix, and with the Disclaimer, which forms part of it. https://www.research.hsbc.com
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OPEC+ remains cautious in
its approach
Capacity limitations will
render the OPEC+ agreement
increasingly irrelevant over
time
2
Equities & Commodities ● Global
9 November 2021
Capacity scarcity in focus
 Coal and gas price spikes add to incremental oil demand, while US
supply response is hitting constraints
 Spare capacity could become increasingly scarce and concentrated
as we move through 2022
 We raise our longer-term forecast from USD65/b Brent to USD75/b
We can see justification for the recent spike in crude prices – not least in the knock-on effects
from tight coal and gas markets (see Global Natural Gas: The crunch is here, and it's not even
winter, 21 September 2021) but also in the continued fall in oil inventories, and in tight physical
markets. Much of the strength still owes itself to OPEC+ policy, and the group’s continually
cautious approach to bringing back supply in the face of ongoing uncertainty on demand. This
policy continues, and was seen in OPEC’s refusal to bring on more supply than the planned
0.4mbd for November and again for December in its latest announcement.
We see the sense of this stance in a near-term outlook which suggests the oil market isn’t out of
the woods yet. First-quarter demand is normally the weakest of the year and our forecasts
concur with OPEC’s that to continue with steady supply increases into and through 1Q risks a
return to oversupply early next year, with resultant downside risk to prices.
The current OPEC+ plan would leave 3.8mbd of supply curbs in place at year-end 2021. Our
supply/demand balances – particularly the resumption of US supply growth - suggest there isn’t
room for all of this to be unwound in 2022, with maybe 2mbd of curbs needing to be kept in
place right though into 2023. But in practice, supply “baselines” and remaining theoretical
supply curbs will become increasingly irrelevant next year in our view.
As the cuts are unwound, an increasing number of producers will hit the limits of their
spare capacity. Spare capacity has deteriorated at several producers - Angola and Nigeria are
already unable to meet their allocations, and Kuwaiti capacity has fallen by 0.5mbd in the past
three years. By the time curbs are eased to 2mbd we calculate less than 3mbd of spare
capacity would remain, with none left in Russia and 70% of the total in either Saudi Arabia or
the UAE. Such an outcome would render the agreement fairly meaningless, would cement the
importance of Saudi supply in the longer-term picture but would also potentially leave the global
system increasingly susceptible to any supply shocks.
At present there appears to be no progress over Iran sanctions negotiations, but talks between
the US and Iran have been scheduled to restart on 29 November (Bloomberg, 3 November
2021). This is an area to watch, as a lifting of sanctions could pave the way to a return of more
than 1mbd of additional Iranian exports to market, easing pressure on balances and requiring
more prolonged OPEC+ restraint if a return to market oversupply was to be avoided.
Raising prices: We raise our 4Q Brent price assumption from USD70/b to USD82/b in
response to the current market tightness. We also raise our longer-term assumptions from
USD65/b Brent (flat real from 2022) to USD75/b flat real.
 Equities & Commodities ● Global
9 November 2021

Additional oil demand from fuel switching, Oil demand could be seasonally weaker in
4Q21, kbd 1Q22 (IEA and OPEC estimates, mbd)
Germany 105
France
100
Italy
Korea 95
Indonesia
Pakistan 90
Brazil
85
Japan
India 80
China
0 20 40 60 80 100 120 OPEC IEA
Source: IEA estimates Source: IEA and OPEC estimates

OPEC+ cuts vs baseline - actual, proposed and HSBC assumptions to YE22, mbd
-

(2)

(4)

(6)

(8)

(10)

(12)
May 20 Jul Sep Nov Jan 21 Mar May Jul Sep Nov Jan-22 Mar May Jul Sep Nov

Original agreement Actual/provisionally agreed Actual/HSBC estimate

Source: OPEC, HSBC estimates

OPEC+ spare capacity, mbd

12

10

-
May 20 Jul Sep Nov Jan 21 Mar May Jul Sep Nov Jan-22 Mar May Jul Sep Nov

KSA Other OPEC Non-OPEC

Source: OPEC, HSBC estimates

HSBC crude price forecasts, USD/b

2019 2020 1Q21 2Q21 3Q21 4Q21e 2021e 2022e 2023e
Current
Brent 64.2 43.3 61.3 69.1 73.2 82.0 71.4 75.0 76.5
WTI 57.0 39.5 58.1 66.2 70.6 79.0 68.5 72.0 73.5
Previous
Brent 70.0 68.4 65.0 66.3
WTI 67.0 65.5 62.0 63.3
Change
Brent 12.0 3.0 10.0 10.2
WTI 12.0 3.0 10.0 10.2
Source: Refinitiv Eikon, HSBC forecasts

3
 Equities & Commodities ● Global
9 November 2021

Prices surge, pushed higher by coal and natural gas

Brent crude had been trading in a range of USD60-75/b for most of this year until it broke out in
September, and prices have now been in the USD80/b’s since the start of October.

There’s no doubt the unprecedented surge in coal and natural gas prices has played a
significant part in this rally, as prices of both have risen multiple times. Beyond the practical
impact on oil demand, which has had a boost of maybe 0.5mbd from fuel switching, it has all
added to the widespread market dialogue of an “energy crisis”.

It is probably fair to describe it as a crisis for natural gas. As we discuss in Global Natural Gas:
The crunch is here, and it's not even winter, (21 September 2021), the global system is
stretched to extremes, and it’s hard to see any real relief this side of the Northern Hemisphere
spring when demand falls again. In oil it’s different, as much of the tightness in the market is
artificially created by OPEC+ restraint in the face of continued demand uncertainty.

Brent and WTI crude prices, USD/bbl Newcastle coal and Europe TTF natural gas,
USD/t and EUR/MWh
90 300 150
80 250 125
70
200 100
60
50 150 75
40 100 50
30
50 25
20
10 0 0
Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21
Brent WTI Coal (LHS) Europe TTF natural gas (RHS)

Source: Bloomberg Source: Bloomberg

And the oil market definitely is still tight. OPEC+ curbs have kept it in a supply deficit since
3Q20, and global inventories continue to decline (see below). Physical market tightness is
evident in the front end of the futures curve, with the Brent futures 1-month / 6-month spread
back to the highs of late 2019. Speculative net long positions have increased in both the Brent
and NYMEX futures markets, but they are not dramatically out of line vs recent historical norms.

ICE Brent and NYMEX WTI crude oil Brent futures 1-month / 6-month spread,
futures curves, USD/b USD/b
85 8
80 6
4
75
2
70 0
-2
65
-4
60 -6
55 -8
1 6 11 16 21 26 31 36 41 46 51 56 -10
Contract month Jan-17 Jan-18 Jan-19 Jan-20 Jan-21
Brent WTI
Source: Bloomberg Source: Bloomberg

4
 Equities & Commodities ● Global
9 November 2021

In the US, there are market-specific upside risks to WTI prices if inventories continue to fall at
Cushing, Oklahoma. If they approach minimum levels, this could lead to a spike in US time-
spreads, although this would have limited practical implications for global markets.

Inventories approaching operating minimum at Cushing

OPEC+ restraint has kept the market in deficit since July 2020. Since then, OECD inventories
have fallen by ~400mb as of August 2021 (the latest available data). This tightening has
eradicated the entire inventory excess built up in 2Q/3Q20, taking stocks down to 160mb below
pre-pandemic (2015-19) five-year average, and below the five-year range for this time of year.

August OECD inventories at
the low end of the range in
days’ demand
In terms of days’ demand cover, August stocks were back to the low end of the 2015-19 range,
but not below it. It could be argued (as OPEC has done) that the 2015-19 period was not
representative of “normalised” inventories, since much of this period was characterised by
market oversupply and high stocks. OPEC has previously referenced 2010-14 as a more
“normal” five-year period, and stocks are currently still above average relative to this. However,
preliminary data points to stocks continuing to fall in September, and we think they could
continue to decline through year-end.

OECD commercial inventories, mb Total OECD commercial stocks of crude

and product, days' demand cover

3,300 80
3,200 75
3,100
70
3,000
2,900 65
2,800
60
2,700
2,600 55
Jan Apr Jul Oct
Dec
Oct
Nov
Jul
Jan

Jun
Apr

Aug
Sep
Mar

May
Feb

15-19 range 2015-2019 Avg 2015-19 range 2015-19 avg

2021 2010-14 ave 2020 2021
2020
Source: IEA Source: IEA

The inventory situation in the US is raising concerns in the industry. Total US crude and product
stocks have shown a broadly similar trend to those of the broader OECD, i.e. they have now
moved below the five-year range. More specifically though, crude stocks at the Cushing,
Oklahoma storage farm (which is the pricing point for NYMEX WTI) are at 26mb, just shy of the
20mb that is required for Cushing to operate efficiently.

Cushing stocks are closing in
on a critically low level but
crude stocks in other regions
are more normal
If this fall were to continue, it would risk a further price spike in WTI. However, to some degree
this is already being reflected in price differentials in the region, which should help alleviate the
situation. WTI Cushing is trading at a premium to WTI Midland and a narrow discount to WTI
Houston, which is a strong pricing signal to divert more inbound flows to Cushing and reduce
the outbound flows. Crude inventories outside of Cushing are more normalised, with crude
inventories in PADD 3 (Gulf Coast) rising by 25mb since the start of October.

5
 Equities & Commodities ● Global
9 November 2021

US commercial inventories of crude & Crude stocks at Cushing OK, mb

products, mb
1,500
1,450 90
1,400 80 Effective capacity
1,350 70
1,300 60
1,250 50
1,200 40
1,150
30
1,100
20
Jan Mar May Jul Sep Nov
2016-2020 Range 2016-2020 Avg Jan Mar May Jul Sep Nov
2020 2021 2016-2020 Avg 2020
2015-19 Avg Effective capacity 2021
Source: EIA Source: EIA

Demand continues to recover, boosted now by fuel switching

Despite the resurgence of COVID-19 cases in various parts of the World in recent months,
demand continues to recover well. In the US for example, demand has returned to pre-
pandemic levels apart from a very recent dip; although jet demand is still lagging due to the lack
of international travel, this is being offset by the strength of both diesel and gasoline. We note
that although the US weekly data remains robust, the reconciled monthly product supplied data
has been less positive with consumption in August averaging 20.5mbd, 650kbd (3.2%) below
the corresponding level in 2019. Meanwhile, Chinese oil demand has been running well ahead
of 2019 levels since late 2020.

Mobility data showing the
strength of recovery in North
America and Europe
Apple mobility data clearly shows the resurgence of transport demand in Asia and Europe in
particular. In Asia, the strength of demand is widespread. Bloomberg reported rationing of fuel
supplies in service stations in some regions of China in order to avert a supply squeeze akin to
that being seen in coal and natural gas (Bloomberg, 27 October 2021). In response to the
tightness of the market China also announced a release of gasoline and diesel reserves to help
ease the situation (Reuters, 1 November 2021).

Apple mobility data (indexed)

180
160
140
120
100
80
60
40
20
0
Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21

LatAm Europe Asia North America

Source: Apple Inc

Demand boost from fuel The latest boost to demand comes partly from the knock-on effects of spiking coal, natural gas
switching ~0.5mbd and LNG prices levels (see Global Natural Gas, 21 September). These are causing extensive
switching to crude or oil products for power generation where possible. The IEA estimates the

6
 Equities & Commodities ● Global
9 November 2021

likely effect on 4Q21 and 1Q22 oil demand to be around 0.5mbd, with the biggest increments in
China, India, Japan and Brazil.

US oil product demand, 4wk rolling ave, Additional oil demand from fuel switching,
mbd 4Q21, kbd
22.5 Germany
21.5 France
20.5
Italy
19.5
Korea
18.5
Indonesia
17.5
16.5 Pakistan
15.5 Brazil
14.5 Japan
13.5 India
Jan Mar May Jul Sep Nov
China
2015-19 range 2015-19 Avg
2020 2021 0 20 40 60 80 100 120
Source: EIA Source: IEA

First-quarter demand is While the current demand outlook is extremely robust, one area for caution is on seasonality.
typically seasonally weak The first quarter of every year is typically seasonally the weakest. Some of these seasonal
trends will most likely be repeated, although it is hard to be certain about the degree to which
they will be offset by continued fuel switching, and/or the continued post-pandemic recovery.
Our current forecasts indicate a pause to the upward demand trajectory or maybe a slight q/q
fall, rather than anything more substantive. However, in its monthly Oil Market Report OPEC is
currently forecasting a more severe q/q decline in 1Q of nearly 2mbd (see below right) –
something which is probably an important factor in its recent decision-making.

Demand should be back to Our forecast for 2021 full-year demand of 96.3mbd is almost 4mbd below that of 2019, but
2019 levels in 2022 largely because of first-half weakness; we expect second-half demand to be 4mbd higher than
in the first half. In 2022, we see full year demand rising to almost 100mbd, recovering all the
way to 2019 levels despite still-weak jet demand. While policy momentum over the energy
transition continues to gather pace, there is no sign yet of any peak in oil demand. As jet fuel
demand recovers, unless there is a meaningful slowdown in global economic growth we think
demand could move towards 102mbd by 2024, although we assume it then plateaus around
this level thereafter before starting to decline towards the end of this decade.

Global demand – HSBC estimates (mbd) Global demand – IEA and OPEC estimates
(mbd)
105
102
100 100
98
95
96
94 90

92 85
90
80
88

OPEC IEA
Source: IEA, HSBC estimates Source: IEA, OPEC

7
 Equities & Commodities ● Global
9 November 2021

US supply recovering, but constraints are emerging

Apart from a weather-induced fall early in the year, US tight crude supply has been edging up
so far in 2021. In September it hit 8.1mbd (see RHS below), vs ~7.8mbd in late 2020. Including
natural gas liquids (NGLs) and conventional crude oil, total US liquids supply has been around
16.8mbd in recent weeks, with most of production shut-in as a result of Hurricane Ida now back
on line. Shell announced at the start of November that the West Delta -143 “A” platform – the
last major facility that was offline – has restarted operations earlier than the 1Q22 restart that
was previously indicated (Shell, 5 November).

For full year 2021 we expect total US liquids output of 16.4mbd. This would be flat on 2020 FY vs FY,
but well down from its level of around 18mbd immediately pre-pandemic. In 2022, we expect total US
supply to grow by 1.1mbd y-o-y, slowing down to an annual growth of 0.5mbd y-o-y in 2023.

US liquids supply (crude and NGLs, mbd) US tight oil supply (mbd)
19 10
Thousands

18
8
17
6
16
15 4
14
2
13
Jan Mar May Jul Sep Nov 0
Jan-19 Jan-20 Jan-21
2018 2019 2020 2021
Bakken EagleFord Other Niobrara Permian
Source: EIA Source: EIA

Since crude prices bottomed in mid-2020 US onshore activity has been recovering steadily. The
frac spread (the number of frac crews active) has jumped from a low of less than 100 to more
than 260 now, although it remains short of its immediate pre-pandemic levels of ~300. This
increase has translated into monthly well completions (wells brought into production) rising to
876 in September. Based on recent average well productivity and core decline rates, this is
above the roughly c800 monthly completions we think are needed to keep onshore production
flat at current levels.

US crude price (USD/b) vs frac spread 1- US crude price (USD/b) vs US oil rig count,
month later lagged by four months
100 500 100 1000

80 400 80 800

60 300 60 600

40 200 40 400

20 100 20 200

0 0 0 0
Nov-18 Nov-19 Nov-20 Nov-21 Nov-18 Nov-19 Nov-20 Nov-21

WTI, USD/b US frac spread 1-mo later (RHS) WTI, USD/b US frac spread 1-mo later (RHS)
Source: Bloomberg Source: Baker Hughes, Bloomberg

8

Wellhead breakevens are
likely to be higher in 2022
Labour shortages are
becoming an issue in the
shale patch
Equities & Commodities ● Global
9 November 2021
There is growing evidence that the price elasticity of US supply is becoming muted by a
combination of cost discipline from public E&P companies, higher wellhead breakevens and
labour shortages.
US tight oil breakevens declined significantly during the last decade, but they are set to rise
again in 2022. Across the five major liquids basins, the average half-cycle breakeven is
estimated by Rystad Energy to rise next year by USD3/b (7%) to USD46/b. The upwards
pressures on breakevens is expected to be most severe in the Eagle Ford and Niobrara (half-
cycle breakeven up USD9/b and USD5/b y-o-y) but less severe in the Permian, with the half-
cycle breakeven expected to be up just USD1/b y-o-y.
US tight oil half-cycle breakevens (USD/b) US drilled uncompleted wells (DUCs)
10,000
140
120 8,000
100 6,000
80
4,000
60
40 2,000
20 0
0 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21
2014 2015 2016 2017 2018 2019 2020 2021e2022e2023e Bakken Eagle Ford
Anadarko Bakken Eagle Ford Permian Other
Niobrara Permian Total DPR Regions
Source: Rystad Energy Source: EIA
The US shale sector is experiencing similar economic constraints as those evident in the rest of
the US economy. Labour shortages and higher equipment costs are feeding through into higher
breakevens that are likely to be higher than 2021 levels for at least the next two years:
 In the September Dallas Federal Reserve survey of US E&P companies, 51% of
respondents said they had difficulty hiring workers. The two main issues were a lack of
qualified applicants and workers looking for higher pay. The growing skills shortage in the
sector is in unlikely to abate, as the US labour market is tight and perceptions of job security
in the industry have been affected badly by the two large downturns of the last six years.
 So far this year most operators have been utilising their inventory of drilled uncompleted
wells (DUCs) in order to minimise drilling cost and maximise spending on well completions.
Completion of DUCs has comprised a third of total well completions year-to-date. However,
this imbalance between well completions and new wells drilled cannot continue indefinitely.
The DUC count has fallen sharply during the last 15 months and is currently at its lowest
level since 1Q 2017 (see above right).
 For operators to keep growing production in 2022/23, a more robust programme of drilling
new wells rather than working through inventory will be required to support growth. The
replenishing of the well inventory through a higher rig count could result in higher drilling
costs as the demand for rigs increases. In addition, with well completions typically
comprising just over half a well’s total cost, a move to an increasing proportion of “full-cycle”
wells (ie drilling and completing a new well rather than completing an already drilled one)
looks set to push up the average incremental capex per well brought on line significantly.
9
 Equities & Commodities ● Global
9 November 2021

Capital discipline evident for public but not private E&Ps

Overall, fairly strong capital discipline has been apparent in 2021 with total US tight oil capex
estimated by Rystad Energy to be only 13% higher y-o-y and down 47% compared to 2019.
However, private companies have been considerably more aggressive with their capex budgets
compared to their public counterparts. Private operators are on track to increase capex by 65%
y-o-y in 2021 compared to just 11% for public companies.

In 2022, Rystad Energy estimates that public E&P companies will increase capex by 21% y-o-y,
but this will still lag the 36% y-o-y growth expected from private companies, a group whose
spending is set to return in aggregate to 2019 levels next year. As a share of total capex,
Rystad estimates that private companies will comprise 40% of total tight oil spending by 2022,
compared to 28% in 2019.

While the US frac count and rig count have both risen sharply from their lows, nearly all the
recent increase in activity has been driven by private operators – these now make up the
highest share of both the frac and rig count. It is interesting to note that despite the recent rally
in energy prices, there has a fairly minimal uptick in activity from the public E&P companies or
oil majors, highlighting continued commitment to capital discipline on their part.

Public E&P companies have maintained their 2021 spending guidance throughout the year and
typically had a frontloaded capex plan which resulted in fraccing activity peaking in 2Q 2021,
supported by their DUC inventory. However, now that the DUC inventory for most public E&Ps
has been depleted, more robust rig programmes are required in order to support more
completion activity in 2022 (see chart below).

Oil rig demand by operator type Frac spread (active frac crews) by operator
type

400 160
350 140
300 120
250 100
200 80
150 60
100 40
50 20

0 0
Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21

Public Private Supermajors Public Private Supermajor

Source: Rystad Energy Source: Rystad Energy

So far in 2021, average productivity across the US shale patch (calculated as new production
per well completed) has remained fairly unchanged despite the increase in activity. We think
there is a risk that we start to see a deterioration in average productivity, not least because
productivity of the private operators is typically lower than for their larger listed peers, and they
are comprising an increasing proportion of total activity.

Despite all these factors, based on our updated price assumptions we think the industry should
have the flexibility to continue to increase average monthly completions from below 900 at
present to an average of over 1,000 in 2022 and potentially more like 1,100 in 2023. Historically,
correlations of well completions with lagged WTI prices would imply average monthly
completions in the range 1,200-1,300 at USD75/b Brent equivalent (~USD72/b WTI) – a level
similar to that seen in 2018 – but we think a combination of continued capital discipline and
issues around labour storages and equipment supply issues will limit further growth of activity in
response to higher oil prices.

10
 Equities & Commodities ● Global
9 November 2021

Other non-OPEC supply – lack of investment will become an issue

Non-OPEC conventional Conventional non-OPEC supply reached a peak of just over 48mbd in 2019. It slumped by more
supply set to recover to than 1mbd in 2020, under a combination of low prices, COVID-19 effects and OPEC+ related
around 2019 levels, but no curtailments. The full-year average looks pretty similar in 2021, but this masks a recovery through the
further year, driven by a combination of improving prices and the unwinding of some of the OPEC+ curbs.

In 2022, we see a recovery in conventional non-OPEC supply to around 2019 levels once more.
Within the OPEC+ group, we see some further unwinding of supply curbs, while we see solid
growth in a few other non-OPEC+ producers, notably Brazil, Canada, Guyana and Norway.

Non-OPEC supply growth, 2022e vs 2019 (excluding OPEC+ countries), mbd

Norway
Canada
Brazil
Guyana
China
Global biofuels
Ecuador
Argentina
India
Egypt
Mexico
Indonesia
Colombia
UK
-0.4 -0.2 0.0 0.2 0.4 0.6
Source: IEA, BP, Company reports, HSBC estimates

Beyond 2022-23, we expect conventional supply to move into decline. Global upstream capex
will probably be c.10% higher in 2021, but it remains ~45% below its levels of 2010-14. While a
significant part of this fall can be ascribed to efficiency gains, it also looks like the industry
continues to underinvest - the result of two industry downcycles in 2015-16 and 2020-21, as
well as (at the margin) increasing climate/ESG-related constraints for European IOCs. Volumes
of liquids being discovered and being sanctioned for development are both running at historical
lows. This lack of investment has been masked by typical project time-lags, as well as the short-
term effects of stronger prices on infield activity and hence on field decline rates.

Conventional non-OPEC supply, mbd

50.0
49.5
49.0
48.5
48.0
47.5
47.0
46.5
46.0
45.5
45.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e 2024e 2025e 2026e 2027e

Source: IEA, HSBC estimates

11

OPEC+ caution reflects risks
of seasonal demand
weakness in 1Q
Our supply/balances imply
~2mbd of cuts will need to
stay in place
12
Equities & Commodities ● Global
9 November 2021
OPEC: capacity constraints could emerge in 2022
The differences between OPEC+ members over supply allocations were resolved in July, with a
1.63mbd increase in the baseline from which cuts are allocated from May 2022, spread across
five countries: Saudi Arabia and Russia (each +0.5mbd), the UAE (+0.33mbd) Iraq (+0.15mbd)
and Kuwait (+0.15mbd). This agreement paved the way for the easing of supply curbs currently
underway, which aims to bring back 2.0mbd of curtailed supply in five monthly increments of
0.4mbd by December, which would leave 3.8mbd of supply curbs still in place by year-end.
August data showed a very small increase in supply (~0.1mbd), but the pace picked up in
September, with closer to 0.5mbd of additional volumes, principally from Iraq, Russia and Saudi
Arabia. Not all countries are in a position to raise capacity – notably Angola and Nigeria which
have suffered meaningful declines in capacity since the pandemic.
Why not raise supply more now? The planned supply increases are subject to a regular
review of market conditions by the OPEC+ monitoring committee. Prior to both of the last two
monitoring meetings, there was market expectation that a bigger monthly increase than the
planned 0.4mbd could be agreed in light of the recent spike in crude prices, and ahead of the
November monitoring meeting there was also political pressure from the US President to do so
(Bloomberg, Reuters 3 November 2021). However, in both meetings OPEC+ declined to so,
and merely stuck to its original plan of adding 0.4mbd for both November and December. This
caution from the group is consistent with its actions of the past 18 months, and partly reflects
the latest resurgence in COVID-19 cases in some parts of the world. Russian Deputy Prime
Minister Novak pointed to a decline in demand in Europe which “underscores the fact that global
oil demand is still under pressure from the COVID-19 variant” (Bloomberg, 4 November 2021).
More likely, it points to reluctance to boost supply too much ahead of what is typically a
seasonally weak first quarter.
OPEC’s projections on the 1Q22 demand outlook (from its latest monthly Oil Market Report) are
more pessimistic than those of the IEA – it sees a 1.9mbd q/q fall to 98.0mbd, vs 98.6mbd on
the IEA’s estimates. As a result, it sees a call on OPEC crude (the amount needed from OPEC
to balance the market) of 26.6mbd, 2.8mbd lower than its forecast for 4Q21 – with only around
0.6mbd of this explained by higher supply from other OPEC+ members. For context, the IEA’s
1Q22 call on OPEC crude is 27.7mbd, down 0.8mbd q/q. Given its own internal projections for
1Q22, it is hardly surprising that OPEC is reluctant to push supply further now.
Curbs will be needed for some time
We don’t see room for OPEC+ to unwind all of its cuts in 2022, or even 2023:
 We’re not convinced phased increases in supply would be possible in the seasonally weak
1Q22 without pushing the market into oversupply, so they may well be paused.
 On our forecasts, if Iranian exports do not increase in 2022, a balanced market would
require OPEC+ supply of ~40mbd in the second half, but most likely no more. This implies
less than 2mbd more cuts could be unwound in 2022, leaving ~2mbd of curbs relative to the
original supply baseline, or some 3.5mbd relative to the recently increased baseline.
 There is no visibility on a return of Iranian exports, although negotiations between Iran and
the US have been scheduled to resume on 29 November after a five-month hiatus
(Bloomberg, 3 November 2021). In theory, if sanctions were eased, Iranian supply could
recover towards ~3.8mbd vs a recent ~2.5mbd, potentially within the space of a few months
(see Oil things considered: If Iranian oil exports return....,11 June 2021). In this case,
OPEC+ supply would have to stay reined in more tightly if the group were to prevent
 Equities & Commodities ● Global
9 November 2021

oversupply and in that event, we estimate OPEC+ supply would be less than 1mbd higher
in 2H22 than in late 2021.
 For 2023, we’re not convinced there is much room for further manoeuvre for the group
either, with demand growth largely offset by non-OPEC supply growth.

OPEC+ cuts vs baseline - actual, proposed and HSBC assumptions to YE22, mbd

(2)

(4)

(6)

(8)

(10)

(12)
May 20 Jul Sep Nov Jan 21 Mar May Jul Sep Nov Jan-22 Mar May Jul Sep Nov

Original agreement Actual/provisionally agreed Actual/HSBC estimate

Source: OPEC, HSBC estimates

OPEC production – quarterly actual and HSBC forecasts, mbd

34.0
32.0
30.0
28.0
26.0
24.0
22.0
20.0
18.0
1Q18 3Q18 1Q19 3Q19 1Q20 3Q20 1Q21 3Q21e 1Q22e 3Q22e
OPEC 10 Iran/Libya/Venezuela
Source: IEA, OPEC, HSBC estimates

Spare capacity set to become
scarce – potentially less than
3mbd by end-2022
Capacity matters much more than baselines, and it looks set to get scarce
The recently baseline adjustments reflect an important reality: many OPEC+ members already
have significant capacity constraints, and more are likely to become apparent through 2022.
With the supply increases planned for the rest of this year, we estimate OPEC+ spare capacity
will fall to 4.0-4.5mbd by the start of 2022. Without higher Iranian supply, this could fall to below
3mbd by the end of 2022, with a rising proportion of OPEC+ members hitting full capacity. This
level of spare capacity – only 3% of global demand – is one that historically made the market
focus on the relative lack of flexibility in the global system, and the reliability of capacity
estimates. Among the more significant OPEC+ producers:
 Angola and Nigeria (with combined baseline supply of 3.3mbd) have seen significant
losses of capacity already, and are unable to produce even at currently curtailed
allocations, let alone participate in further easing of the cuts. Their combined September
supply was 2.38mbd vs an allocation of 2.96mbd.

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 Equities & Commodities ● Global
9 November 2021

 Russia’s baseline allocation was raised to 11.5mbd in July, but its crude capacity is
probably only around 10.5mbd (with a further ~1.2mbd of condensates not included in the
OPEC+ agreement). We expect Russia to hit full capacity for crude production by mid-2022
if OPEC+ easing of its cuts proceeds in line with our forecast, though, we expect to see
condensates supply growth continue in the coming years. The only non-OPEC member we
expect to have any meaningful spare capacity – albeit limited – by mid-2022 is Kazakhstan.
 Kuwait Oil Company (KOC) recently reported another 0.18mbd fall in its capacity to 2.63mbd
for the year to March 2021. This now represents a decline of 0.5mbd in the past three years,
and leaves KOC’s capacity at a 12-year low (MEES, 22 October 2021). This suggests
Kuwait’s total capacity (including its share of the Neutral Zone) is no more than 2.9mbd, and in
our view casts significant doubts on the country’s goal to reach 3.5mbd by 2025.
 Iraq is OPEC’s second-largest producer – its supply averaged 4.6mbd in 2017-19 and its
updated baseline supply is 4.8mbd from next May. The IEA puts current capacity at
4.93mbd, but there is much uncertainty over this figure given the turmoil in the industry.
Largely as a result of unattractive contract terms Shell exited the Majnoon project and the
0.5mbd West Qurna 1 in 2018, and Exxon has stated its intention to sell its stake in West
Qurna 1 (MEES, 7 July 2021). BP has also recently announced that it will spin off its
interest in the 1.5mbd Rumaila field into a joint venture with partner Sinopec. However, Iraq
recently signed a broad-ranging deal with TotalEnergies which included development of the
smaller Ratawi field (MEES, 22 October 2021).
 Two of OPEC’s biggest producers have clear plans to grow capacity. Saudi Arabia has
started an expansion of capacity from 12mbd to 13mbd, a level it expects to reach by 2027.
The UAE has bucked the trend in recent years, and has already grown capacity significantly
– to a current level of 3.8mbd on the IEA’s estimate, or 4mbd on state producer ADNOC’s
estimate. It now plans to raise this figure to 5mbd by 2030. Both countries see room for a
greater market share, as a result of a lack of investment elsewhere. Saudi Aramco CEO
Amin Nasser stated recently the company’s view that global spare capacity is currently only
3-4mbd, and it is declining fast (Bloomberg, 23 October 2021).

OPEC+ spare capacity, mbd

12

10

-
May 20 Jul Sep Nov Jan 21 Mar May Jul Sep Nov Jan-22 Mar May Jul Sep Nov

KSA Other OPEC Non-OPEC

Source: OPEC, HSBC estimates

In our view, before the OPEC+ cuts are fully unwound its agreement could become more or less
meaningless by virtue of the disparity in spare capacity across the group, which leaves an ever-
diminishing number of key producers able to participate in any supply upside.

14
 Equities & Commodities ● Global
9 November 2021

Capacity becoming not just Without an increase in Iranian exports, we see virtually no spare capacity remaining outside
scarce, but highly Iraq, Kuwait, Saudi Arabia and the UAE, with roughly 70% of this in Saudi Arabia and the UAE.
concentrated In our view this leaves OPEC+ policy de facto in control of very few players once more. Maybe
the most interesting of these is Iraq; historically, Iraq’s co-operation with OPEC cuts has been
much worse than many, but then we think this is countered by greater uncertainty around its
actual and potential crude production capacity.

OPEC+ remaining spare capacity, 2H22e (mbd)

3.0

2.5

2.0

1.5

1.0

0.5

0.0
Russia Others Kazakh. Angola Nigeria Algeria Others Kuwait Iraq UAE S. Arabia
Source: OPEC, HSBC estimates

Supply/demand balances

2021
 We expect global demand to have recovered from around 93mbd in 1Q21 and 95mbd in 2Q
to more than 98mbd in the second half of this year. We forecast full-year demand up 5mbd
(6%) y/y at 96.3mbd (vs 96.1mbd previously), which would still leave it 3.4mbd (3%) below
that of 2019.
 Following its July meeting, OPEC+ is in the process of easing 2.0mbd of its remaining cuts
by year-end, in five monthly steps of 0.4mbd. The group continues to monitor the market to
ensure this crude is needed; we expect the progressive easing as planned, but so far
OPEC+ has declined to add any supply on top of these increments, despite price strength.
 These increases would take OPEC+ crude supply to almost 38mbd by December, 3.5mbd
higher than of the first quarter of this year. It would leave 3.8mbd of nominal supply curbs
still in place at the end of December.
 US tight liquids supply has returned to modest growth, although total US volumes were hard
hit recently by the effects of hurricane Ida. We expect US liquids supply to be flat y/y for the
full year, but for tight liquids volumes to be a good 0.5mbd higher in the second half than in
the first half. Outside the US, we expect non-OPEC conventional supply (excluding those
countries in the OPEC+ agreement) to be broadly flat y/y, but again with a slightly stronger
second half than first half.
 Putting all this together points to a supply deficit of ~1.7mbd for the year (vs ~1.6mbd
previously), with the market remaining in deficit and inventories continuing to decline
through year-end.

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 Equities & Commodities ● Global
9 November 2021

2022 and beyond

 We think global demand will continue to build strongly on its 2021 recovery in 2022 – we
see full year demand of 99.9mbd (vs 99.7mbd previously), up 3.5mbd y/y and right back to
2019 levels again. Given that this strength is likely despite the persistent weakness in jet
fuel demand, it bodes well for further demand growth in 2023. However, we expect a
modest seasonal dip in demand q/q in the first quarter of 2022.
 Given the strength in crude prices, we expect to see strong growth in US supply in 2022.
We forecast tight liquids supply up 1.0mbd, and total US volumes up 1.1mbd. This is only a
modest increase to our supply forecast despite our higher price assumptions, due to the
emerging evidence of manpower constraints in the industry, which we think are limiting its
response somewhat. In addition, we expect non-OPEC conventional supply to grow by
around 0.4mbd in 2022 (excluding supply from members of OPEC+) although we see this
figure declining slowly thereafter.
 One of the biggest unknowns remains the potential return of Iranian supply, should
sanctions be eased. Although Iran has stated that it will return to negotiations before the
end of November (Wall Street Journal, 27 October) there is as yet no evidence to point to
any possible lifting of sanctions. Our model does not assume any lifting of sanctions or
increase in Iranian exports through 2022-23. If this were to occur, it could potentially add
more than 1mbd to global supply, and we would expect the OPEC+ group to adjust its own
supply if needed in order to prevent the market becoming oversupplied.
 We think OPEC+ will be cautious of adding more new supply into the seasonally weak 1Q
next year in order to avoid oversupply, and we assume supply is kept unchanged through
this quarter, with 3.8mbd of cuts still in place. Thereafter, given our expectations of global
demand and non-OPEC growth we see the curbs easing to around 2.0mbd by mid-year, but
no further – we don’t think the market could absorb more crude.
 For 2023, the picture looks similar. Demand growth is likely to return to a more normal
~1mbd, and much of this will be offset by US and other supply growth. So our balances
imply that once more, 2mbd or so of cuts will need to remain in place, even without a return
of Iranian supply.
 Importantly, the OPEC+ agreement will lose much of its relevance as cuts are eased to this
sort of level, as few members will have any meaningful capacity left. With 2mbd of cuts in
place, supply allocations point to spare capacity being 3mbd at best, with only four
countries having any meaningful capacity – Saudi Arabia, the UAE, Iraq and Kuwait.

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 Equities & Commodities ● Global
9 November 2021

HSBC supply/demand table (mbd)

2018 2019 2020 2021e 2022e 2023e
Demand
USA 20.5 20.5 18.2 19.7 20.4 20.3
Europe 14.3 14.3 12.4 13.0 13.6 13.5
Other OECD 13.2 12.9 11.4 11.9 12.3 12.2
Total OECD 48.0 47.7 42.0 44.6 46.2 46.1
China 13.0 13.7 13.8 15.1 15.6 16.1
India 5.0 5.0 4.5 4.7 5.0 5.2
Total non-OECD 51.3 52.0 48.8 51.7 53.6 54.9
Global demand 99.3 99.7 90.8 96.3 99.9 101.0
Demand growth 1.1% 0.4% -8.9% 6.1% 3.6% 1.1%

Supply
Permian crude 3.5 4.4 4.5 4.6 5.1 5.3
Other US tight oil 3.9 4.3 3.6 3.3 3.5 3.8
US tight oil 7.4 8.7 8.1 7.9 8.6 9.1
US conventional oil 3.6 3.6 3.2 3.2 3.3 3.3
US total oil 11.0 12.2 11.3 11.1 11.9 12.4
US NGLs 4.4 4.8 5.2 5.3 5.5 5.6
Total US liquids 15.4 17.1 16.5 16.4 17.5 18.0
Other Non-OPEC (ex-OPEC NGLs) 47.7 48.3 46.8 46.6 48.2 48.5
Total Non-OPEC* 63.0 65.3 63.2 63.0 65.7 66.5
of which:
US Tight liquids 10.4 12.1 11.4 11.2 12.2 12.8
Conventional liquids 47.7 48.1 46.7 46.8 48.3 48.5
Biofuels/refinery gains 4.9 5.1 5.1 5.0 5.2 5.3
OPEC NGLs 5.1 5.3 5.2 5.3 5.3 5.4
Non-OPEC & OPEC non-crude 68.1 70.6 68.4 68.3 71.0 71.9
OPEC crude 31.7 29.6 25.5 26.3 28.8 29.5
Global supply 99.8 100.3 93.9 94.6 99.9 101.4

Implied inventory build/(draw) 0.6 0.6 3.1 -1.7 0.0 0.4

Call on OPEC crude 31.1 29.1 22.4 28.0 28.8 29.1
Call on OPEC-10 25.1 24.7 19.6 23.9 24.6 24.8

Annual changes, mbd

Global demand 1.1 0.4 -8.9 5.6 3.5 1.1
Non-OPEC supply 2.6 2.3 -2.1 -0.2 2.6 0.8
US Permian 1.0 0.9 0.1 0.1 0.5 0.2
Total US tight crude 1.6 1.3 -0.6 -0.2 0.7 0.4
Total US crude 1.6 1.3 -0.9 -0.2 0.9 0.4
Total US NGLs 0.6 0.5 0.3 0.1 0.2 0.1
Total US 2.2 1.7 -0.6 -0.1 1.1 0.5
Other non-OPEC 0.4 0.6 -1.5 -0.1 1.6 0.3
Non-OPEC & OPEC NGL supply 2.6 2.5 -2.2 -0.1 2.7 0.9
Call on OPEC -1.5 -2.1 -6.7 5.6 0.8 0.2
Call on OPEC-10 -0.8 -0.5 -5.1 4.4 0.7 0.1
OPEC crude production -0.2 -2.1 -4.2 0.9 2.5 0.6
Source: IEA, BP, EIA, Rystad, NPD, ANP, HSBC estimates

17
 Equities & Commodities ● Global
9 November 2021

HSBC supply breakdown (mbd)

2018 2019 2020 2021e 2022e 2023e
Non-OPEC
US Permian 3.49 4.36 4.45 4.58 5.10 5.29
US other tight oil 3.91 4.32 3.65 3.31 3.53 3.78
US NGLs 3.01 3.42 3.34 3.36 3.58 3.71
US total tight liquids 10.41 12.10 11.44 11.25 12.21 12.77
USA 15.35 17.07 16.48 16.40 17.45 17.99
Canada 5.30 5.54 5.31 5.64 5.81 5.79
Mexico 2.07 1.92 1.91 1.88 1.83 1.86
UK 1.09 1.12 1.03 0.95 0.93 0.94
Norway 1.85 1.74 2.01 2.13 2.20 2.40
Russia 11.56 11.68 10.67 10.83 11.81 11.99
Azerbaijan 0.80 0.77 0.72 0.72 0.72 0.73
Kazakhstan 1.90 1.92 1.81 1.83 1.89 1.90
Oman 0.98 0.97 0.95 0.93 0.94 0.92
Qatar 1.88 1.90 1.86 1.75 1.71 1.63
China 3.80 3.84 3.90 4.02 4.03 3.92
Malaysia 0.72 0.66 0.60 0.32 0.40 0.38
India 0.87 0.83 0.77 0.74 0.80 0.82
Indonesia 0.81 0.79 0.75 0.68 0.69 0.63
Brazil 2.68 2.88 3.06 3.05 3.15 3.28
Argentina 0.59 0.62 0.61 0.63 0.64 0.67
Colombia 0.87 0.89 0.78 0.68 0.74 0.69
Ecuador 0.52 0.53 0.48 0.59 0.55 0.52
Guyana 0.00 0.00 0.08 0.11 0.20 0.32
Egypt 0.67 0.65 0.62 0.58 0.59 0.55
Other conventional 3.76 3.93 3.77 3.60 3.43 3.30
Non-OPEC conventional 47.66 48.15 46.70 46.80 48.31 48.46
Biofuels/Refinery gains 4.94 5.09 5.10 5.00 5.18 5.27
Non-OPEC 63.01 65.34 63.24 63.04 65.69 66.50
OPEC NGLs 5.13 5.30 5.17 5.27 5.34 5.40
Non-OPEC + OPEC NGLs 68.13 70.63 68.41 68.32 71.03 71.90

OPEC crude 31.71 29.64 25.47 26.33 28.83 29.47

of which:
Saudi Arabia 10.55 10.16 9.41 9.12 10.35 10.55
Iran 3.53 2.36 2.06 2.40 2.50 2.53
Iraq 4.63 4.67 4.00 4.02 4.34 4.41
Kuwait 2.75 2.68 2.39 2.42 2.65 2.71
Libya 1.08 1.20 0.29 1.14 1.14 1.15
Nigeria 1.62 1.74 1.44 1.35 1.55 1.60
UAE 3.09 3.02 2.71 2.72 3.09 3.22
Venezuela 1.37 0.83 0.45 0.56 0.55 0.63
Angola 1.43 1.33 1.23 1.13 1.11 1.13
Other 1.66 1.65 1.47 1.47 1.55 1.56
OPEC-10 25.7 25.2 22.7 22.2 24.6 25.2
Source: IEA, BP, EIA, Rystad, NPD, ANP, HSBC estimates

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 Equities & Commodities ● Global
9 November 2021

Disclosure appendix
Analyst Certification
The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s)
whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering
analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or
issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other
views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect
their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific
recommendation(s) or views contained in this research report: Gordon Gray, Charles Swabey and Kim Fustier

Important disclosures
Equities: Stock ratings and basis for financial analysis
HSBC and its affiliates, including the issuer of this report (“HSBC”) believes an investor's decision to buy or sell a stock should
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 Equities & Commodities ● Global
9 November 2021

Rating distribution for long-term investment opportunities

As of 08 November 2021, the distribution of all independent ratings published by HSBC is as follows:
Buy 60% (42% of these provided with Investment Banking Services in the past 12 months)
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Sell 6% (39% of these provided with Investment Banking Services in the past 12 months)
For the purposes of the distribution above the following mapping structure is used during the transition from the previous to current
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 Equities & Commodities ● Global
9 November 2021

Additional disclosures
1 This report is dated as at 09 November 2021.
2 All market data included in this report are dated as at close 05 November 2021, unless a different date and/or a specific
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 Equities & Commodities ● Global
9 November 2021

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Global Natural Resources & Energy
Research Team
Metals and Mining CEEMEA Latin America
Bülent Yurdagül +90 212 376 46 12 Lily Yang, CFA +1 212 525 0990
North America & Latin America bulentyurdagul@hsbc.com.tr lilyanna.x.yang@us.hsbc.com
James Steel +1 212 525 3117
james.steel@us.hsbc.com Ildar Khaziev, CFA +44 20 7992 3302 Utilities
ildar.khaziev@hsbc.com
Jonathan Brandt, CFA +1 212 525 4499 Europe
jonathan.l.brandt@us.hsbc.com Anup Kataria, CFA +91 80 6737 2218 Adam Dickens +44 20 7991 6798
anup.g.kataria@hsbc.co.in adam.dickens@hsbcib.com
CEEMEA
Leroy Mnguni +27 11 676 4224 Latin America Verity Mitchell +44 20 7991 6840
leroy.mnguni@za.hsbc.com Lily Yang, CFA +1 212 525 0990 verity.mitchell@hsbcib.com
lilyanna.x.yang@us.hsbc.com
Shilan Modi +27 82 558 9818 Asia
shilan.modi@za.hsbc.com Asia Regional Head of Utilities and Alternative
Head of Resources & Energy Research, Energy and HK and mainland China
Asia Asia-Pacific Conglomerates Research
Head of Resources & Energy Research, Thomas C. Hilboldt, CFA +852 2822 2922 Evan Li +852 2996 6619
Asia-Pacific thomaschilboldt@hsbc.com.hk evan.m.h.li@hsbc.com.hk
Thomas C. Hilboldt, CFA +852 2822 2922
thomaschilboldt@hsbc.com.hk Jeremy Chen +8862 6631 2866 Puneet Gulati, CFA + 91 22 2268 1235
jeremy.cm.chen@hsbc.com.tw puneetgulati@hsbc.co.in
Howard Lau, CFA +852 2996 6625
howard.h.b.lau@hsbc.com.hk Puneet Gulati, CFA +91 22 2268 1235 Daniel Yang +852 2996 6976
puneetgulati@hsbc.co.in daniel.h.yang@hsbc.com.hk
Paul Choi +822 3706 8758
paulchoi@kr.hsbc.com Akshay Malhotra +91 89 6897 9321 Paul Choi +822 3706 8758
akshay.malhotra@hsbc.co.in paulchoi@kr.hsbc.com
Yushin Park +82 2 3706 8756
yushin.park@kr.hsbc.com Saurabh Jain +91 22 6164 0691 Yushin Park +822 3706 8756
saurabh2jain@hsbc.co.in yushin.park@kr.hsbc.com
Energy
Yonghua Park, CFA +852 3941 7005 Wilson Ling +852 2914 9795
Europe yonghua.park@hsbc.com.hk wilson.s.l.ling@hsbc.com.hk
Global Sector Head, Oil and Gas
Gordon Gray +44 20 7991 6787 Nicholas Lai +886 2 6631 2867 Latin America
gordon.gray@hsbcib.com nicholas.yl.lai@hsbc.com.tw Lily Yang, CFA +1 212 525 0990
lilyanna.x.yang@us.hsbc.com
Kim Fustier +44 20 3359 2136 Chemicals
kim.fustier@hsbc.com CEEMEA
Europe/US Alternative Energy
Charles Swabey +44 20 3268 3954 Global Sector Head, Chemicals EEMEA Head of Industrials Research
charles.swabey@hsbc.com Sriharsha Pappu, CFA +44 20 7991 9243 Sean McLoughlin +44 20 7991 3464
sriharsha.pappu@hsbc.com sean.mcloughlin@hsbcib.com
Tarek Soliman, CFA +44 20 3268 5528
tarek.soliman@hsbc.com Martin Evans +44 20 7991 2814 Evan Li +852 2996 6619
martin1.j.evans@hsbc.com evan.m.h.li@hsbc.com.hk
Abhishek Kumar +91 80 4555 2753
abhishek.kumar@hsbc.co.in CEEMEA Daniel Yang +852 2996 6976
Global Sector Head, Chemicals daniel.h.yang@hsbc.com.hk
Swarup Bhattar +91 80 4555 2760 Sriharsha Pappu, CFA +44 20 7991 9243
swarup.bhattar@hsbc.co.in sriharsha.pappu@hsbc.com

Nicholas Paton, CFA +971 4 423 6923

nicholas.paton@hsbc.com

Prateek Bhatnagar +91 80 4555 2757

prateekbhatnagar@hsbc.co.in

Asia
Jeremy Chen +8862 6631 2866
jeremy.cm.chen@hsbc.com.tw

Puneet Gulati, CFA + 91 22 2268 1235

puneetgulati@hsbc.co.in

Saurabh Jain +91 22 6164 0691

saurabh2jain@hsbc.co.in

Yonghua Park, CFA +852 3941 7005

yonghua.park@hsbc.com.hk

Nicholas Lai +886 2 6631 2867

nicholas.yl.lai@hsbc.com.tw
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