A week ago, the 39th OPEC and non-OPEC Ministerial Meeting was held via videoconference, chaired by Prince Abdulaziz bin Salman Al-Saud, Saudi Arabia’s Minister of Energy. According to a press release, the group pledged to “develop a mechanism to assess the maximum sustainable production capacity (MSC) of member countries that will be used as reference for 2027 production baselines”.
Last month, commodity analysts at Standard Chartered reported that global oil demand hit an all-time high of 103.79 million barrels per day (mb/d) in August, marking the third successive month in which a new all-time demand high has been set. According to StanChart, global oil demand growth clocked in at a healthy 1.32 mb/d in August. Well, it appears that oil markets are poised to finish the year on a bullish note.
Oil markets continue to be lackluster compared with the strength displayed by metals and gas markets.
StanChart has predicted that the bearish sentiment coupled with low market volatility are likely to persist until OPEC+ announces its new policy.
Experts have predicted that positive developments by OPEC+ could trigger another oil price rally.
According to StanChart, the global oil surplus we are currently witnessing is due to seasonal weakness in the month of January.
StanChart notes that there’s been a January inventory draw in only three years since 2004, with the first month of the year averaging a build of 1.2 million barrels per day.
StanChart has predicted that this surplus is transitory and will flip into a 1.6 mb/d deficit in February.
Standard Chartered has predicted very little incremental growth in US crude oil supply in 2024.
Stanchart sees y/y growth U.S. crude production growth decelerating strongly and even turn negative in December 2024.
StanChart says the deceleration in supply growth is the result of capex barely meeting high natural decline rates in shale oil production.
The bearish sentiment that has pervaded the energy markets in the new year won’t go away easily.
Standard Chartered: oil demand is more robust than expected.
Standard Chartered: oil markets are seriously underestimating geopolitical risks.