The new issue of OIES Oil Monthly, including our latest short-term oil market outlook to 2025, is now available.
– Our Brent price outlook is maintained at $81.9/b in 2024 and $77.0/b in 2025, unchanged from last month. The erratic price movements in September continued into October. Despite the escalating tensions in the Middle East, the bearish sentiment prevails. Concerns over global oil demand and an oversupplied market in 2025 persist, despite an improving global economic outlook, a large Chinese fiscal stimulus announcement, and continuous downward revisions of non-OPEC+ supply so far this year. Accordingly, we expect Brent to average $79.3/b in 4Q24, before gradually reversing and remaining confined in the $75-80/b range in 2025. The persistent global stock draws amid further potential revisions of non-OPEC supply growth in 2025 indicate that the $75-85/b price range could be maintained well into next year, even as OPEC+ proceeds with unwinding its cuts as planned. The risk that escalating geopolitical tensions could still result in supply disruptions remains heightened.
– The oil market is forecast at a 870 kb/d deficit in 2024 and a 370 kb/d surplus in 2025. Lower OPEC+ output reflecting largely improved compliance levels in September, has prompted us to deepen the previously projected deficit in 2024 by 90 kb/d to 870 kb/d. For 2025, we reduced further the projected surplus by 150 kb/d to 370 kb/d on lower crude offsetting higher global NGLs and other liquids supply. OECD stocks are expected to extend their downward trend to year-end, with low refinery margins starting to pressure runs and in response to draw elevated product stocks.
– Our global oil demand growth forecast is unchanged at 1.3 mb/d in both years. US data continue to surprise to the upside offsetting OECD weaknesses elsewhere and maintaining the total OECD demand growth outlook marginally positive in 2024 followed by a 110 kb/d expansion in 2025. Our non-OECD demand growth outlook is largely unchanged in both years at 1.25 mb/d and 1.23 mb/d, respectively. Overall, global oil demand is seen stabilizing at a robust growth rate close to the 2010-2019 average in both 2024 and 2025, after the strong post-COVID growth years.
– Global oil supply is forecast to grow 360 kb/d in 2024 and by 2.6 mb/d in 2025, assuming OPEC+ returns its production as planned. We have lowered global oil supply by 50 kb/d in 2024 and by 70 kb/d in 2025, on lower OPEC+ crude which is forecast to contract y/y by 1.1 mb/d in 2024 and expand by 1.4 mb/d in 2025. Our non-OPEC+ crude growth forecast is unchanged at 820 kb/d this year and 960 kb/d in 2025, as key sources of growth such as the US and Brazil continue to underperform. Global NGLs and other liquids supply expands y/y by 680 kb/d and 230 kb/d, respectively.