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OIES Oil Monthly latest short-term oil market outlook to 2024

The Oxford Institute for Energy Studies
The Oxford Institute for Energy Studies


EnergiesNet.com 11 30 2023

The new issue of OIES Oil Monthly, including our latest short-term oil market outlook to 2024, is now available.

– We have reduced our 2023 Brent forecast $1.8/b to $83.4/b in 2023 and $2.5/b to $84.1/b in 2024, from $85.3/b and $86.6/b forecast last month. Brent in October reversed the 9% hike from September falling to $91.1/b from $94.0/b (-3% m/m), before extending its losses in the w/c Nov. 6 to $81.6/b. This is the lowest since July with large liquidation of long positions in paper markets amplifying the downside. In 2024, the price outlook is pushed lower by $2.5/b keeping Brent prices pinned in the $80-90/b range, conditional to no-change in OPEC+ output policy for 2024 after the upcoming Ministerial Meeting on Nov. 26.

– The oil market balance is forecast at a surplus in both 2023 and 2024 at 160 kb/d and 590 kb/d respectively. We have lowered the 4Q23 deficit by 770 kb/d to -410 kb/d, from -1.2 mb/d forecast last month, on weaker OECD demand amplified by base adjustments in historical US demand data confronted by higher-than-expected OPEC+ supplies. For 2024, the oil market is now expected to flip into surpluses from Q1-onwards, as global supply grows at a similar rate to this year while global demand growth softens. OECD stocks are projected to build closer to their 5-year average in 2024 and break above the average by year-end.

– Our forecast for global oil demand growth remains unchanged at 2 mb/d in 2023 and 1.2 mb/d in 2024. We have scaled back global demand growth by 260 kb/d to 1.6 mb/d in 4Q23 and by 360 kb/d to 1.2 mb/d in 1Q24 with the downgrades concentrated in the OECD, offsetting last month’s upgrades to the non-OECD outlook in the same period that remains relatively unchanged. For 2024, non-OECD demand growth is still expected to soften to 1.2 mb/d from 1.9 mb/d in 2023 as rebound effects fade.

– We have raised our global supply growth outlook in both 2023 and 2024 to 1.6 mb/d, 120 kb/d and 130 kb/d above last month’s forecast. Higher-than-anticipated OPEC+ output confronted by resilient US production has prompted us to raise our global supply growth outlook by 270 kb/d to 130 kb/d in 4Q23 and by 220 kb/d to 420 kb/d in 1Q24, followed by small upgrades in 2024, mainly for Venezuela, Kazakhstan and Russia.

– The balance of risks tilts to the upside in 4Q23 on geopolitics, but price risks move closer to balance again in 2024. Geopolitical pressures around the Israel conflict and a rise in precautionary demand, have lifted the balance of price risks in the near-term, before shifting again near balance in 2024.

oxfordenergy.org 11 30 2023

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