Crude oil: increased vigilance against oversupply
2024-09-27
■ International organizations have lowered their global crude oil demand forecasts, but OPEC's optimistic attitude remains prominent
■ Against the seasonal backdrop of weak demand for crude oil, pay attention to whether the US and Chinese economies can support demand
International organizations released global crude oil supply and demand forecasts in September. Regarding the growth of global crude oil demand, the Organization of the Petroleum Exporting Countries (OPEC) has lowered its daily demand growth for 2024 to 2.03 million barrels (2023: 122.1 million barrels → 2024: 142.4 million barrels) and for 2025 to 1.75 million barrels (159.9 million barrels). The US Energy Information Administration (EIA) has lowered the daily demand growth for 2024 to 940000 barrels (2023: 121.4 million barrels → 2024: 130.8 million barrels), and for 2025 to 1.52 million barrels (14.6 million barrels). The International Energy Agency (IEA) has lowered the daily demand growth for 2024 to 900000 barrels (2023: 121 million barrels → 2024: 130 million barrels) and maintained the daily growth of 900000 barrels (14 million barrels) for 2025. The three major institutions are all wary of the decline in demand from the United States and China, but OPEC remains particularly optimistic about demand.
Regarding the growth of global crude oil supply, EIA predicts that major oil-producing countries will reduce production. The daily supply growth for 2024 will be lowered to 310000 barrels (2023: 118.7 million barrels → 2024: 121.8 million barrels), but the daily supply growth for 2025 will be raised to 2.42 million barrels (146 million barrels). The IEA has lowered its daily supply growth for 2024 to 700000 barrels (2023: 12.2 million barrels → 2024: 12.9 million barrels) and raised its daily supply growth for 2025 to 2.1 million barrels (15 million barrels). Based on these predictions, global crude oil supply and demand are expected to exceed supply in 2024, while the EIA predicts a supply-demand balance in 2025 and IEA predicts oversupply.
OPEC+ announced on the 5th that Saudi Arabia and eight other countries have agreed to extend the voluntary production reduction of 2.2 million barrels per day until the end of November, and gradually reduce the reduction from December onwards. Even if the tense situation in the Middle East leads to a reduction in crude oil supply, the excess capacity of OPEC+ is still sufficient to make up for it, so the pressure on crude oil futures prices (WTI) to rise due to the reduction in supply is limited. The current period is transitioning from the peak summer driving season to the winter heating season, and the expected increase in crude oil demand in the short term is relatively limited. As the Federal Reserve (FRB) begins its interest rate cut cycle and Chinese authorities introduce additional monetary easing policies and support measures for the stock and real estate markets, concerns are being raised about whether the economies of these two countries can support a slowdown in demand. In addition, due to the uncertain prospects of the US presidential election, the upward potential of WTI may be limited in the near future.
■ Against the seasonal backdrop of weak demand for crude oil, pay attention to whether the US and Chinese economies can support demand
International organizations released global crude oil supply and demand forecasts in September. Regarding the growth of global crude oil demand, the Organization of the Petroleum Exporting Countries (OPEC) has lowered its daily demand growth for 2024 to 2.03 million barrels (2023: 122.1 million barrels → 2024: 142.4 million barrels) and for 2025 to 1.75 million barrels (159.9 million barrels). The US Energy Information Administration (EIA) has lowered the daily demand growth for 2024 to 940000 barrels (2023: 121.4 million barrels → 2024: 130.8 million barrels), and for 2025 to 1.52 million barrels (14.6 million barrels). The International Energy Agency (IEA) has lowered the daily demand growth for 2024 to 900000 barrels (2023: 121 million barrels → 2024: 130 million barrels) and maintained the daily growth of 900000 barrels (14 million barrels) for 2025. The three major institutions are all wary of the decline in demand from the United States and China, but OPEC remains particularly optimistic about demand.
Regarding the growth of global crude oil supply, EIA predicts that major oil-producing countries will reduce production. The daily supply growth for 2024 will be lowered to 310000 barrels (2023: 118.7 million barrels → 2024: 121.8 million barrels), but the daily supply growth for 2025 will be raised to 2.42 million barrels (146 million barrels). The IEA has lowered its daily supply growth for 2024 to 700000 barrels (2023: 12.2 million barrels → 2024: 12.9 million barrels) and raised its daily supply growth for 2025 to 2.1 million barrels (15 million barrels). Based on these predictions, global crude oil supply and demand are expected to exceed supply in 2024, while the EIA predicts a supply-demand balance in 2025 and IEA predicts oversupply.
OPEC+ announced on the 5th that Saudi Arabia and eight other countries have agreed to extend the voluntary production reduction of 2.2 million barrels per day until the end of November, and gradually reduce the reduction from December onwards. Even if the tense situation in the Middle East leads to a reduction in crude oil supply, the excess capacity of OPEC+ is still sufficient to make up for it, so the pressure on crude oil futures prices (WTI) to rise due to the reduction in supply is limited. The current period is transitioning from the peak summer driving season to the winter heating season, and the expected increase in crude oil demand in the short term is relatively limited. As the Federal Reserve (FRB) begins its interest rate cut cycle and Chinese authorities introduce additional monetary easing policies and support measures for the stock and real estate markets, concerns are being raised about whether the economies of these two countries can support a slowdown in demand. In addition, due to the uncertain prospects of the US presidential election, the upward potential of WTI may be limited in the near future.