OIES Oil Monthly – Issue 35
The new issue of OIES Oil Monthly, including our latest short-term oil market outlook to 2025, is now available.
– Our Brent price forecast is little changed from last month at $85.2/b in 2024 and $78.5/b in 2025, from $84.5/b and $79.0/b, respectively. Our forecast this month incorporates the June 2 decisions by OPEC+ and the group of eight OPEC+ producers that announced voluntary cuts in April 2023 and November 2023. The group of eight OPEC+ agreed on the extension of the April 1.65 mb/d voluntary cuts until the end of 2025 and on the extension of the November 2.2 mb/d additional voluntary cuts until the end of 3Q24, prompting stock draws through year-end, before their gradual phase out on a monthly basis from October 2024 to September 2025. Accordingly, we now expect Brent to rise from the low-$80s in H1 and hover above $85/b in the second half of the year to average $86.5/b, before reversing and remaining confined in the $75-80/b range in 2025.
– We have deepened the previously projected oil market deficit in 2024 by 340 kb/d to -720 kb/d and raised the expected surplus in 2025 by 380 kb/d to 740 kb/d. Revisions to OPEC+ output have shifted the global balance into a 1.4 mb/d deficit in 2H24. For 2025, we have eliminated the previously expected 210 kb/d surplus in Q1 with the market projected to remain near balance before shifting to surpluses from Q2-onwards averaging 970 kb/d (2Q25-4Q25). This assumes a Sep-24 to Sep-25 increase in OPEC+ output of 2.48 mb/d, considering also UAE’s base upgrade by 300 kb/d gradually phased-in throughout next year, albeit the group of eight OPEC+ countries could pause or reverse their output hikes at any time subject to market conditions. OECD stocks are now projected to start falling through the second half of the year.
– Our forecast for global oil demand growth is revised by -90 kb/d to 1.5 mb/d in 2024 and by 100 kb/d to 1.4 mb/d in 2025. The downward revision for 2024 is mainly driven by the OECD underperformance in H1. The non-OECD demand growth outlook for 2024 remains resilient at 1.4 mb/d, led by China and India with annual gains of 600 kb/d and 215 kb/d, respectively. A positive picture in other non-OECD, mainly the Middle East and other Asia, boosts the non-OECD growth outlook in 2025 to 1.3 mb/d.
– We have lowered our global supply growth forecast by 720 kb/d to 370 kb/d in 2024 and upgraded supply growth by 840 kb/d to 2.9 mb/d in 2025. OPEC crude growth is revised lower by 560 kb/d to -610 kb/d in 2024 and upgraded by 380 kb/d to 1.35 kb/d in 2025, assuming no pause or reversal to the agreed OPEC+ production path between October 2024 and September 2025. Outside OPEC+, non-OPEC liquids supply growth is maintained at 1.1 mb/d in both years.