Analysts at Standard Chartered Bank, including the company’s Head of Commodities Research, Paul Horsnell, have in a report as gathered from Rigzone, said that oil supply and demand balances show a significant tightening this year, saying that May and June are critical for oil fundamentals.
“Our oil supply and demand balances show a significant tightening this year relative to the surplus conditions of early 2023,” the analysts stated in the report.
“Our model shows a cumulative global stock draw of 189 million barrels in H1-2024, a sharp improvement from the H1- 2023 stock build of 218 million barrels which overhung the market and flattened forward price curves last year,” the report added.
“The fastest rate of H1 stock draws in our model are in May and June; we are now entering a key period for oil fundamentals in terms of whether the market will tighten further or disappoint,” they continued.
“We forecast year on year demand growth at 1.62 million barrels per day in May and 1.74 million barrels per day in June,” they analysts said in the report.
“For comparison, the US Energy Information Administration (EIA) also puts June demand at 103.8 million barrels per day but is cautious about May, forecasting 102.2 million barrels per day,” they added.
According to the report, OPEC+ ministerial meeting is set for June 1 in Vienna. Information on actual May and June fundamentals at that point will be limited and largely confined to reflected indicators, such as market spreads, prices, and sentiment, they added.
