Crude Oil: Focus on the OPEC Plus Ministerial Meeting in June
2024-05-23
■ International institutions generally hold a stable outlook on crude oil supply and demand, closely monitoring whether OPEC Plus will continue to reduce production independently
■ Seasonal supply and demand fluctuations, such as increased demand during the driving season and temporary supply reductions caused by storms, should also be noted
International institutions have released the outlook for world crude oil supply and demand as of May. In terms of global crude oil demand growth, the Organization of the Petroleum Exporting Countries (OPEC) is expected to maintain a daily increase of 2.25 million barrels (2023: 122.1 million barrels → 2024: 144.6 million barrels) in 2024 and an increase of 1.85 million barrels (163.1 million barrels) in 2025. The US Energy Information Agency (EIA) has lowered its growth rate for 2024 to 920000 barrels per day (2023: 119.2 million barrels per day → 2024: 128.4 million barrels per day) but raised it to 1.42 million barrels per day (142.6 million barrels per day) for 2025. The International Energy Agency (IEA) has lowered its target to 1.1 million barrels per day (2023: 121 million barrels per day → 2024: 132 million barrels per day) in 2024 and slightly increased it to 1.2 million barrels per day (143 million barrels per day) in 2025. Although there is a consensus on moderate demand growth, OPEC holds a relatively optimistic attitude towards demand growth in emerging countries such as China and India. On the contrary, the IEA believes that weak domestic demand in China and the popularity of electric vehicles and high-speed rail will slow the growth of crude oil demand, and it maintains a cautious attitude.
As for the growth of global crude oil supply, The EIA will increase to 970000 barrels per day in 2024 (117.9 million barrels per day in 2023 → 127.6 million barrels per day in 2024) and decrease to 1.89 million barrels per day (146.5 million barrels per day) in 2025. The IEA has lowered its target to 1.1 million barrels per day in 2024 (116 million barrels per day in 2023 → 127 million barrels per day in 2024) and 1.9 million barrels per day (146 million barrels per day) in 2025. Based on these data, EIA and IEA predict an oversupply in 2024 and an oversupply in 2025. However, these surpluses are relatively small, so the supply and demand of crude oil will continue to maintain an essential equilibrium state, and even slight changes in supply and demand may lead to increased fluctuations in WTI futures prices.
When considering the future of global crude oil supply and demand, it's crucial to focus on the global economic trends in terms of demand, particularly the seasonal growth factors triggered by the summer driving season. In terms of supply, the OPEC Plus ministerial meeting scheduled for June 1st holds significant importance. If the independent production reduction is not extended, there will be an oversupply in 2024, exerting pressure on WTI to decline. This is a key event that our audience should be aware of and potentially involved in. Additionally, it's important to stay updated on the situation in the Middle East. Reports suggest that the ceasefire negotiations between Israel and the Hamas Islamic Organization have not reached an agreement, and the situation remains uncertain. Moreover, from June onwards, the supply capacity may temporarily weaken as we enter the storm season, including hurricanes. WTI is expected to stabilize above $80 in the short term.
■ Seasonal supply and demand fluctuations, such as increased demand during the driving season and temporary supply reductions caused by storms, should also be noted
International institutions have released the outlook for world crude oil supply and demand as of May. In terms of global crude oil demand growth, the Organization of the Petroleum Exporting Countries (OPEC) is expected to maintain a daily increase of 2.25 million barrels (2023: 122.1 million barrels → 2024: 144.6 million barrels) in 2024 and an increase of 1.85 million barrels (163.1 million barrels) in 2025. The US Energy Information Agency (EIA) has lowered its growth rate for 2024 to 920000 barrels per day (2023: 119.2 million barrels per day → 2024: 128.4 million barrels per day) but raised it to 1.42 million barrels per day (142.6 million barrels per day) for 2025. The International Energy Agency (IEA) has lowered its target to 1.1 million barrels per day (2023: 121 million barrels per day → 2024: 132 million barrels per day) in 2024 and slightly increased it to 1.2 million barrels per day (143 million barrels per day) in 2025. Although there is a consensus on moderate demand growth, OPEC holds a relatively optimistic attitude towards demand growth in emerging countries such as China and India. On the contrary, the IEA believes that weak domestic demand in China and the popularity of electric vehicles and high-speed rail will slow the growth of crude oil demand, and it maintains a cautious attitude.
As for the growth of global crude oil supply, The EIA will increase to 970000 barrels per day in 2024 (117.9 million barrels per day in 2023 → 127.6 million barrels per day in 2024) and decrease to 1.89 million barrels per day (146.5 million barrels per day) in 2025. The IEA has lowered its target to 1.1 million barrels per day in 2024 (116 million barrels per day in 2023 → 127 million barrels per day in 2024) and 1.9 million barrels per day (146 million barrels per day) in 2025. Based on these data, EIA and IEA predict an oversupply in 2024 and an oversupply in 2025. However, these surpluses are relatively small, so the supply and demand of crude oil will continue to maintain an essential equilibrium state, and even slight changes in supply and demand may lead to increased fluctuations in WTI futures prices.
When considering the future of global crude oil supply and demand, it's crucial to focus on the global economic trends in terms of demand, particularly the seasonal growth factors triggered by the summer driving season. In terms of supply, the OPEC Plus ministerial meeting scheduled for June 1st holds significant importance. If the independent production reduction is not extended, there will be an oversupply in 2024, exerting pressure on WTI to decline. This is a key event that our audience should be aware of and potentially involved in. Additionally, it's important to stay updated on the situation in the Middle East. Reports suggest that the ceasefire negotiations between Israel and the Hamas Islamic Organization have not reached an agreement, and the situation remains uncertain. Moreover, from June onwards, the supply capacity may temporarily weaken as we enter the storm season, including hurricanes. WTI is expected to stabilize above $80 in the short term.