ICE Brent rose almost 1.6% yesterday after the US carried out new airstrikes against the Houthis in Yemen, while the market would also have been supported by the strength of the stock markets.
However, the IEA’s latest monthly oil market report was somewhat bearish. The agency forecasts that global oil demand growth will slow to 1.2 million barrels per day in 2024 from 2.3 million barrels per day in 2023. This is partly due to post-COVID demand recovery which is largely behind us, while GDP growth this year is also expected to increase. be below trend in most major economies. The IEA expects global oil supply to grow by 1.5 million barrels a day in 2024, almost entirely due to non-OPEC+ production. OPEC+ production is expected to remain largely unchanged, although much will depend on OPEC+ policy for the rest of the year. The IEA sees a substantial surplus in the oil market if OPEC+ withdraws its current voluntary cuts in 2Q24.
The EIA’s weekly inventory report shows that US commercial crude oil inventories fell by 2.49 million barrels over the past week and crude oil exports increased by 1.71 million barrels per day. Stocks of refined products increased. Gasoline and distillate inventories grew by 3.08 million barrels and 2.37 million barrels respectively. Next week’s post will cover a period where there were several outages due to frigid weather conditions across much of the US. Crude oil production is likely to drop due to the outages we’ve seen in North Dakota , while refinery activity will slow as freezing conditions pushed Gulf Coast refiners to reduce run rates. It is estimated that about 15% of refining capacity on the US Gulf Coast has been affected due to the colder weather.