The tepid demand for growth will be offset by a significant increase in oil production, particularly from the Americas, including the United States, Canada, Brazil, and Guyana and Fatih Birol, Executive Director of the International Energy Agency, said global oil markets are poised to experience a surplus of crude flows in the current year.
Birol suggests that this surge in production will more than suffice to meet the rising global demand, indicating a stabilization of the oil market and a moderation of prices throughout 2024, barring major geopolitical disruptions or extreme weather events, reports Al-Qabas daily..
Haitham Al-Ghais, Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), expresses confidence in strong long-term oil demand projections. He clarifies that Saudi Arabia’s decision to defer plans for increasing production capacity should not be misconstrued as a signal of declining oil demand
Birol predicts a modest rise in global oil consumption, ranging between 1.2 to 1.3 million barrels per day, attributed to slowing economic growth in China and other nations.
The recent monthly report from OPEC reveals fluctuations in oil production among member states, with Kuwait witnessing a decline in production while several others experienced marginal increases. Overall, OPEC’s production decreased in January 2024, with the organization raising its expectations for global economic growth in 2024 and 2025. However, OPEC maintains its previous forecast for global crude demand growth at 2.2 million barrels per day for the current year.
Meanwhile, financial institutions like Morgan Stanley have revised their price forecasts for Brent crude, anticipating a rise to $85 per barrel due to OPEC’s commitment to production cuts. Despite tightening conditions in the oil market, demand remains robust, prompting adjustments in forecasts for both demand and supply growth.
Warren Patterson of ING Group NV highlights the significance of OPEC+’s decision regarding voluntary supply cuts, suggesting that failure to extend these cuts could lead to a surplus in the second quarter of 2024.
