The global oil market is poised for a marginal supply surplus in 2024, even if OPEC+ nations extend their cuts into the next year, Toril Bosoni, head of the International Energy Agency’s oil markets and industry division, told Reuters on Tuesday.
Presently, the oil market is experiencing a deficit, and stocks are depleting rapidly. “Global oil stocks are at low levels, which means that you risk increased volatility if there are surprises on either the demand side or the supply side,” she cautioned.
OPEC+ is considering additional oil supply cuts during its upcoming meeting, responding to a 16% drop in prices since late September. Despite OPEC+ cuts and geopolitical conflicts, oil prices have slid to around $82 per barrel for Brent crude from a 2023 high of nearly $98.
The total oil output cuts pledged by OPEC+ members, including Saudi Arabia and Russia, amount to 5.16 million barrels per day, or about 5% of daily global demand. The cuts initiated in late 2022 aim to stabilize the oil market and support prices.
While OPEC+ is set to convene to discuss potential measures, concerns about future demand and a surplus in 2024 continue to influence oil prices. The existing voluntary production cuts, extended by Saudi Arabia until the end of 2023, are part of a broader deal to limit supply until 2024.
As the oil market faces uncertainties, the IEA emphasizes the importance of closely monitoring global oil stocks and the potential for increased market volatility in the coming months.
