A research note published on Thursday from international banking group Standard Chartered forecast a sizeable 1.9 mbbl/d shortfall by Q3 2024
A global oil market supply deficit is likely to appear as 2024 progresses, and continue into 2025, despite possible production increases coming from OPEC+ nations, according to a market assessment.
A research note published on Thursday from international banking group Standard Chartered forecast a sizeable 1.9 million barrels per day (mbbl/d) shortfall by Q3 2024. This will then fall a little to 1.41 million barrels per day during 2025.
The group argued that global oil markets will easily be able to absorb any increase coming from OPEC+ members as they consider rolling back voluntary production cuts of 2.2 million barrels per day.
The OPEC+ announcement earlier in June prompted something of a sell-off, with front-month Brent dropping below $77 per barrel (bbl), more than $15/bbl below April’s high.
Prices recovered soon after, with Brent for July delivery exceeding $82 per barrel on Wednesday.
The banking group said the price drops were based on a combination of factors, most notably macroeconomic pessimism and speculative shorts.
The group forecasts a drop to around $60/bbl for Brent crude over the next few months, with the long-term trend remaining bearish.
Meanwhile, the IEA on Wednesday stated that global oil demand is expected to hit its highest level by 2030. In addition, the IEA projects that oil supply capacity will significantly surpass demand by the end of this decade.
Its June 2024 Oil Market Report forecasts that global oil demand, which includes biofuels, averaged just more than 102 million barrels per day in 2023 and will level off near 106 million barrels per day towards the end of this decade.
Global oil production capacity is expected to rise in the coming years, with the US leading the surge. The report predicts that by 2030, total supply capacity will reach around 114 million barrels per day – or 8mbbl/d more than the projected global demand.
