BAKU, Azerbaijan, December 20. In line with the recent analysis by the Oxford Institute of Energy Studies (OIES), the outlook for the oil market in 2024 has shifted towards a narrower balance, projecting a modest deficit of 130 kb/d, Trend reports.
This marks a substantial adjustment from the earlier forecast of a surplus of 570 kb/d. The revised projection is influenced by the additional voluntary cuts implemented by OPEC+, prompting a revision of the anticipated surplus in the first quarter of 2024 from 670 kb/d to a deficit of 350 kb/d, following a deficit of 590 kb/d in the fourth quarter of 2023.
Assuming a gradual phase-out of the 1.7 mb/d OPEC+ and Saudi voluntary cuts in the second quarter of 2024, the oil market is expected to persist in a 230 kb/d deficit in Q2, gradually moving towards near balance in Q3 and building to a marginal surplus of 100 kb/d in Q4. The overall forecast for 2024 suggests a well-balanced oil market, with a small deficit of 130 kb/d, following a minor deficit of 40 kb/d in 2023. However, this projection implies that OECD commercial stocks will continue to be constrained throughout 2024.
The most recent data, as of October 2023, indicates that OECD stocks are 71.2 million barrels below their 5-year average, with crude stocks tightening to -56 million barrels, while the tightness in product stocks eased to -8.5 million barrels from -77.6 million barrels in June. Looking ahead to 2024, after increasing by another 23.8 million barrels to approximately 50 million barrels below the 5-year average at the end of 2023, OIES anticipates that OECD commercial stocks will remain under pressure in the first three quarters of 2024, sustaining levels close to those observed in October (-74.1 million barrels), before gradually easing closer to their 5-year average in the final quarter of the year.
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