iPhone | iPad
Android
Huawei
Prize purse valued at over half a million dollars
KT APPDOWNLOAD
Non-Opec supply surge may lead to market surplus in 2025
Global oil markets are poised to swing from a deficit to a surplus next quarter
Very Large Crude Carriers (VLCCs) line up at the Port of Corpus Christi, Texas, where they are being loaded with crude oil for shipping worldwide. — Reuters file
The global oil market is bracing for a softer supply-demand balance on the back of a surge in non-Opec+ oil production, market pundits said
BofA Global Research analysts said in a report highlighted an uptick in non-Opec+ oil production, particularly from Brazil, Guyana, Canada, and the United States, which is expected to grow by approximately one million barrels per day in 2024 and by 1.6 million barrels per day in 2025. “This increase comes as Opec+ considers reintroducing additional barrels to the market later in the year, potentially adding to the surplus,” they said.
BofA Global Research forecast comes as Spencer Dale, BP chief economist warned that Opec+ has limited scope to boost output as that would put pressure on oil prices, given increasing supply from the US, Brazil and Guyana.
“They will also be nervous about bringing oil back on because if they do so, the total supplies are growing more quickly than demand and that will lead to instability in the market,” Dale told reporters in New Delhi, adding that the decision is up to the group itself.
Global oil markets are poised to swing from a deficit to a surplus next quarter should Opec+ proceed with provisional plans to bring back idled output starting in October, data last week from the International Energy Agency showed. Opec and its allies have been withholding supplies for almost two years to prop up prices.
However, crude has given up most of its gains this year as China’s lacklustre economic growth countered Opec+ supply cutbacks. That leaves the oil market divided over whether the group and its allies will unwind some of its production cuts.
Apart from demand, tensions in the Middle East, supply disruptions and weather conditions will determine oil prices next year, Dale said.
Oil prices meanwhile remain depressed, with API’s inventory report becoming the latest contributing factor despite the modest size of the estimated build. In addition to that, hopes of a ceasefire in the Middle East also weighed on oil prices as they reduced the risk of a supply disruption, and the perception of weak Chinese demand remained stable.
BofA’s projections indicate that global oil demand will rise by around one million barrels per day in 2024 and by 1.1 million barrels per day in 2025. These figures suggest that the market could see a surplus of 700,000 barrels per day in 2025, leading to a significant build-up in both commercial and strategic oil inventories, the report suggests.
The report also forecasts that Brent crude oil prices will average $86 per barrel in 2024 before declining to $80 per barrel in 2025, reflecting the anticipated softer market conditions.
More news from Business
Leaders underscored the need to explore new areas of untapped potential
Data highlights Abu Dhabi’s increasing attractiveness as a leading hub for technological innovation and business
Events such as the Dubai Shopping Festival, Pre-Ramadan, and Ramadan Sale impacted consumers spending
First timers should consider entry through an aggressive hybrid equity fund
Lender plans to broaden its scope of digital asset offerings in the coming months
Tax policy has emerged as a key focus for investors ahead of the Nov. 5 election
Kristian Cuku’s journey from ordinary beginnings to remarkable success