Issue 34

Authors: OIES,

OIES Oil Monthly – Issue 34

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

– We have reduced our Brent forecast $1/b to $84.5/b in 2024 and $2/b to $79/b in 2025, from $85.4/b and $81.0/b forecast last month. We have revised lower our Q2 price forecast by $2.4/b to $87.6/b, from $90.1/b previously, mainly reflecting the containment of Iran-Israel tensions priced-in last month. Tightening balances in Q3 however continue to support Brent at $86.2/b, before falling back in the low-$80s in Q4, assuming OPEC+ gradually unwinds its voluntary cuts by Q3. This boosts the uncertainty to our outlook this month, where a potential extension of the OPEC+ voluntary cuts beyond June could sustain Brent in the $85-90/b range in H2, all other things equal.

– The oil market is forecast at a 340 kb/d deficit in 2024 and a 380 kb/d surplus in 2025, from previous -560 kb/d and 210 kb/d, respectively. Weaker-than-expected actuals in Q1 global demand amid a stronger supply outlook in Q2, reflecting slow progress on full OPEC+ compliance and upward forecast revisions in NGLs, have prompted us to lower the 2024 deficit by 220 kb/d. The 2024 revisions however were moderated by strengthening supply/demand in Q3 shifting the previously projected small 100 kb/d surplus into a 290 kb/d deficit. For 2025, we lifted the projected surplus by 170 kb/d, on higher non-OPEC and other liquids supply exceeding small forecast gains in global demand.

– We maintain our global demand growth forecast at 1.6 mb/d in 2024 and 1.3 mb/d in 2025. Our oil demand outlook is little changed this month, with weaker Q1 actuals in Chinese demand growth being largely offset by a 220 kb/d upgrade to 710 kb/d y/y growth in H2. For 2025, our global outlook is improved by small improvements in India and other non-OECD lifting our global demand growth forecast by 90 kb/d to 1.3 mb/d. Gasoline and jet fuel demand remain supportive to the 2024 outlook, with diesel/gasoil demand persisting as the weakest point.

– We have raised our global supply growth forecast by 100 kb/d to 1.1 mb/d in 2024 and by 50 kb/d to 2 mb/d in 2025. Our higher forecast for 2024 largely reflects an upgrade in NGLs supply, while our global crude growth outlook remains relatively unchanged at 700 kb/d, with the US accounting for more than half of incremental growth (+380 kb/d). For 2025, we have raised non-OPEC crude growth by 100 kb/d to 920 kb/d with production in the Americas–led by the US, Canada and Brazil– accounting for the entire upgrade, moderated by small downgrades in OPEC crude and other liquids growth. Our outlook however continues to assume the gradual return of the OPEC+ cuts in 3Q24.