The U.S. Energy Information Administration (EIA) expects global oil production to be lower than previously
anticipated after OPEC+ announced it will extend its crude oil production cuts through 2024 and Saudi Arabia
announced an additional voluntary oil production cut of 1 million barrels per day in July.

In light of this, EIA forecasts lower crude oil inventories and higher prices in its June Short-Term Energy Outlook
(STEO), with the Brent crude oil price expected to average $79 per barrel in the second half of 2023 and $84 per
barrel in 2024. This is an increase of $1 per barrel and $9 per barrel from last month's forecasts, respectively.

Moreover, EIA predicts overall growth in global oil production in 2023 and 2024, led by increased production from
non-OPEC countries despite the OPEC+ extension and Saudi Arabia's additional cuts. In addition, the
consumption of liquid fuels such as gasoline and jet fuel is on the road to establishing new record highs in 2023
and 2024, largely driven by non-OECD countries—especially China.

Joe DeCarolis, EIA Administrator, elaborated: “We expect to see demand for travel continue to increase, which
drives our forecast for record consumption of petroleum products. The petroleum market remains highly
uncertain, so we will continue monitoring developments and tracking supply and demand dynamics.”

Following OPEC+'s crude oil production cuts for 2023, the U.S. Energy Information Administration slightly revised
its forecasts, reducing OPEC production by 0.5 million b/d for the rest of 2023 and increasing the Brent crude oil
spot price. On the other hand, Ed Morse, Citigroup's global head of commodities research, pointed out that Brent
oil prices were likely to fall below $80 a barrel despite OPEC+'s efforts to support that level with production cuts.
Morse also predicted that oil prices could fall even below $70 a barrel.

Regarding U.S. crude oil production, EIA believes it will set annual record highs in 2023 and 2024, though growth
in domestic crude oil production is slowing. This slower production growth may reflect a combination of the use of
capital to increase dividends and repurchase shares instead of investments in new production; the effects of
tighter labour markets and higher costs; and increased pressure on oilfield supply chains.

On the other hand, EIA estimates that U.S. dry natural gas production reached a record average of 104 billion
cubic feet per day in April and expects natural gas production to remain just below that level for the rest of the
year. Natural gas prices at the benchmark Henry Hub are about 70 per cent lower than their peak last year,
which is decreasing new gas-only drilling. Despite this, associated natural gas production is predicted to increase
in the Permian Basin in the short term, offsetting decreases in other regions.

“Drilling in the Permian Basin typically produces a blend of hydrocarbons that includes crude oil and natural gas.
So as producers increase their crude oil production in the region, we expect natural gas production to increase
as well,” said DeCarolis.

EIA also expects a 24 per cent increase in electricity produced by solar power this summer compared with last
summer. The increase is largely driven by an increase in solar capacity, as solar has been the leading source of
new electricity generating capacity so far this year.

Oil outlook 'broadly supportive' for prices
In Wood Mackenzie's view, the decision by OPEC+ to extend current production cuts and the additional voluntary
1 million b/d reduction for July from Saudi Arabia should provide support for prices in the rest of 2023.

Ann-Louise Hittle, Vice President Macro Oils, at Wood Mackenzie, underlined: “Setting aside various markets'
fears of possible global recession, the outlook for oil demand and supply remains broadly supportive for Brent
prices in the second half of 2023.

“We forecast a significant implied global stock draw in 3Q 2023, and we expect the OPEC+ 4 June decision to
increase the implied stock draw for that quarter due to mostly the additional voluntary production cuts Saudi
Arabia announced.”

Wood Mackenzie estimates that the global oil demand will rise 2.4 million b/d on an annualized basis, eclipsing a
1.5 million b/d year-on-year gain in total liquids supply, with Brent forecast to average $84.70/bbl in 2023. The
company expects global oil demand to surpass total liquids supply in 2Q through 4Q 2023, provided market
concerns about economic weakness ease.

“OPEC+ faced several tricky issues at its biannual meeting. Mainly, ongoing fears in the greater financial markets
that China's economic recovery is not happening and therefore demand growth is seen as a risk, as well as the
geopolitical complications of reorganising, reassigning and agreeing on an additional production cut for the rest
of this year,” elaborated Hittle.