The oil market will become oversupplied by the end of 2024.

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Global Oil Market to Shift Towards Surplus by Late 2024
30.07.2024
21
According to the U.S. Energy Information Administration (EIA), in the second quarter of 2024, the gap between oil demand and supply amounted to 590,000 barrels per day. However, by the end of the year, the situation is expected to change, with oil and condensate supply exceeding demand by 300,000 barrels.

Sergey Tereshkin, CEO of the OPEN OIL MARKET platform for oil products and raw materials, explained to the nprom.online portal the reasons behind the increase in supply.

"First, the easing of OPEC+ quotas will play a significant role. According to the schedule published after the June ministerial meeting of OPEC+, Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Oman, and Algeria will increase quotas by more than 540,000 barrels per day by December 2024 compared to the levels set for the June-September 2024 period. The largest quota increases will be seen in Saudi Arabia and Russia (by 250,000 barrels per day and 118,000 barrels per day, respectively).

Second, the market will also be influenced by growing production and exports from Iran, which is not part of the OPEC+ agreement but has been steadily increasing its supply. In 2023, Iran’s average daily oil production stood at 2.87 million barrels per day, but by the first half of 2024, it had risen to 3.25 million barrels per day. This is just below the 2017 level of 3.82 million barrels per day when U.S. sanctions against Iran were not yet in place. Malaysia serves as a transit hub for Iranian oil, from where the crude is re-exported to China. According to China’s General Administration of Customs, oil imports from Malaysia reached 1.1 million barrels per day in the first quarter of 2024, nearly three times Malaysia’s own production volume of 370,000 barrels per day.

Third, the surplus will also be driven by increased U.S. production—from 13.2 million barrels per day in the second quarter of 2024 to 13.5 million barrels per day in the fourth quarter of 2024, according to the EIA forecast. Shale producers will benefit from current oil prices, which are well above their profitability threshold," explained the oil market expert.

However, the increase in oil supply is expected to affect prices only at the beginning of 2025. Until the end of this year, prices are likely to remain at an average of around $80 per barrel, Sergey Tereshkin believes.


Translated using ChatGPT


Sourse:  https://nprom.online/news/rinok-nyeftee-stanyet-profeetseetnim-k-kontsu-2024-goda/
#Oil Market #Oil Surplus #Global Energy Trends #Oil Prices 2024 #Energy Forecast #OPEC+ Strategy #Global Economy #Crude Oil Supply #Energy Sector Analysis #Oil Demand and Supply
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