London, 04 March 2024, (Oilandgaspress): – Global oil market balances tightened in January despite apparent demand weakness. An extreme Arctic freeze that swept through key oil producing regions in the United States and Canada prompted significant supply outages that coincided with fresh voluntary output curbs by some OPEC+ countries. Escalating geopolitical tensions in the Middle East added further upward momentum, as oil tankers circumventing the Red Sea disrupted supply flows to global markets. Brent crude oil futures rose by $5/bbl during the month and were trading around $83/bbl at the time of writing.
The expansive post-pandemic growth phase in global oil demand has largely run its course. The pace of growth already eased sharply, from 2.8 mb/d in 3Q23 to 1.8 mb/d in 4Q23, with an apparent slowdown in China underpinning an 830 kb/d decline in consumption in the final quarter of the year. The deceleration will gather pace in 2024, with world oil demand growth forecast to average 1.2 mb/d, only half last year’s solid expansion. As in 2023, gains will be dominated by a few key countries, most notably China, and to a lesser extent India and Brazil. The three major economies are set to account for 78% of growth in global oil demand in 2024, that is forecast to reach a new peak of 103 mb/d.
While higher global oil supply this year, led by the United States, Brazil, Guyana and Canada, should more than eclipse the expected rise in world oil demand, a sharp decline in output in January set the year off to a difficult start. Extreme weather conditions shut in more than 900 kb/d of production across North America. The steep loss coincided with fresh OPEC+ voluntary output cuts of around 300 kb/d, resulting in a massive 1.4 mb/d m-o-m decline in global oil supply. However, the rising wave of non-OPEC+ oil growth resumes in 2Q24, driving output on an upward trajectory for the rest of the year. World oil supply is set to increase by 1.7 mb/d to a record 103.8 mb/d in 2024, with non-OPEC+ providing 95% of the incremental barrels.
OPEC+ crude oil production1
million barrels per day
| Dec 2023 Supply |
Jan 2024 Supply |
Jan Prod vs Target |
Jan-2024 Implied Target1 |
Sustainable Capacity2 |
Eff Spare Cap vs Jan3 |
|
|---|---|---|---|---|---|---|
| Algeria | 0.95 | 0.91 | 0.0 | 0.91 | 0.99 | 0.08 |
| Congo | 0.26 | 0.25 | -0.03 | 0.28 | 0.27 | 0.02 |
| Equatorial Guinea | 0.05 | 0.05 | -0.02 | 0.07 | 0.06 | 0.02 |
| Gabon | 0.22 | 0.23 | 0.06 | 0.17 | 0.23 | 0 |
| Iraq | 4.33 | 4.23 | 0.23 | 4.0 | 4.82 | 0.59 |
| Kuwait | 2.55 | 2.47 | 0.06 | 2.41 | 2.86 | 0.39 |
| Nigeria | 1.36 | 1.4 | -0.1 | 1.5 | 1.41 | 0.01 |
| Saudi Arabia | 8.95 | 8.97 | -0.01 | 8.98 | 12.11 | 3.14 |
| UAE | 3.21 | 3.21 | 0.3 | 2.91 | 4.28 | 1.07 |
| Total OPEC-94 | 21.88 | 21.72 | 0.5 | 21.22 | 27.02 | 5.3 |
| Iran5 | 3.15 | 3.15 | 3.8 | |||
| Libya5 | 1.18 | 1.03 | 1.23 | 0.2 | ||
| Venezuela5 | 0.8 | 0.83 | 0.82 | -0.01 | ||
| Total OPEC | 27.01 | 26.73 | 32.87 | 5.5 | ||
| Azerbaijan | 0.48 | 0.47 | -0.08 | 0.55 | 0.54 | 0.07 |
| Kazakhstan | 1.62 | 1.62 | 0.15 | 1.47 | 1.67 | 0.05 |
| Mexico6 | 1.62 | 1.64 | 1.65 | 0.01 | ||
| Oman | 0.8 | 0.76 | 0.0 | 0.76 | 0.85 | 0.09 |
| Russia | 9.48 | 9.44 | -0.01 | 9.45 | 9.86 | |
| Others 7 | 0.82 | 0.85 | -0.02 | 0.87 | 0.88 | 0.04 |
| Total Non-OPEC | 14.83 | 14.79 | 0.05 | 13.1 | 15.44 | 0.25 |
| OPEC+ 18 in Nov 2022 deal5 | 35.09 | 34.87 | 0.55 | 34.32 | 40.82 | 5.54 |
| Total OPEC+ | 41.84 | 41.52 | 48.32 | 5.75 |
1. Includes extra voluntary curbs where announced. 2. Capacity levels can be reached within 90 days and sustained for an extended period. 3. Excludes shut in Iranian, Russian crude. 4. Angola left OPEC effective 1 Jan 2024. 5. Iran, Libya, Venezuela exempt from cuts. 6. Mexico excluded from OPEC+ compliance. 7. Bahrain, Brunei, Malaysia, Sudan and South Sudan.
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