OIES Oil Monthly – Issue 33

The new issue of OIES Oil Monthly, including our latest short-term oil market outlook to 2025, is now available.

– Tighter-than-expected balances compounded by heightened geopolitical risks have prompted us to raise our Brent price forecast by $2.5/b to $85.4/b in 2024 and by $1.6/b to $81.0/b in 2025. Our Brent price forecast revisions this month largely reflect an improving global oil demand outlook on the back of a resilient global economy, as geopolitical risks rise and become more pressing. We have now raised our 2Q24 price forecast to $90/b from $81.4/b, with H2 prices falling back to the mid-$80s assuming no further extension of the OPEC+ cuts in Q3. At the time of writing, the consequences of Iran’s direct retaliatory attack against Israel remain unknown, but they do add a new layer of uncertainty to this month’s outlook. For now, the price band in 2024 ranges between $74/b and $99/b, with the upper limit rising by $7.6/b since last month.

– We have deepened the previously projected oil market deficit in 2024 by 160 kb/d to -560 kb/d and lowered the expected surplus in 2025 by -180 kb/d to 210 kb/d. The resilience of global oil demand in 1Q24 while global supply was subdued has prompted us to deepen the deficit in the first quarter to -1 mb/d followed by -1.3 mb/d in Q2. Assuming a gradual reversal of the OPEC+ voluntary cuts in 3Q24, we forecast the market to flip into a small 100 kb/d surplus before returning close to balance in Q4. For 2025 as a whole, we reduced the previously projected surplus by 180 kb/d on the back of a more robust global demand outlook.

– We have raised our global demand growth forecast by 180 kb/d to 1.6 mb/d in 2024 and by 90 kb/d to 1.2 mb/d in 2025. Our improved forecast for 2024 largely reflects a more resilient OECD demand outlook, led by the US, up by 140 kb/d to 170 kb/d. The gains to the OECD outlook for this year carry over to 2025 with small upgrades lifting our previous forecast by 80 kb/d to 75 kb/d. The non-OECD demand growth outlook remains relatively unchanged at 1.5 mb/d in 2024 and 1.1 mb/d in 2025.

– Our global oil supply forecast is little changed, up by 60 kb/d to 1 mb/d in 2024 and by 70 kb/d to 2 mb/d in 2025. Heading into 2Q24, OPEC+ is set to extend its 1.7 mb/d voluntary cuts with the forecast assuming stronger output discipline by the group. Russia will also enforce a progressive voluntary production cut that will see its output falling to 8.98 mb/d by June and lifting the total OPEC+ voluntary cuts in Q2 to 2.2 mb/d. Outside OPEC+, non-OPEC crude is forecast to grow by 810 kb/d, unchanged from last month, with the Americas remaining this year’s mainstay of expansion led by the US, Brazil, Guyana and Canada.

To purchase your copy of Issue 33 please click here.

Sponsors, Benefactors and Press please email Andreas Economou for a copy.

By: OIES