NEW DELHI: The world oil production is projected to fall by 870 kb/d (thousand barrel per day) in the first quarter of 2024 compared to the fourth quarter of 2023 on account of heavy weather-related shut-ins and new curbs from OPEC+, according to the International Energy Agency (IEA) oil marketing report.
The report also noted that the global market is anticipated to face a deficit throughout the year. Additionally, OPEC+ voluntary cuts will remain in effect through 2024, adjusting the market balance from a surplus to a slight deficit.
“Global oil demand is forecast to rise by a higher-than-expected 1.7 mb/d in Q124 due to an improved outlook for the United States and increased bunkering,” the report reads.
“From the second quarter, non-OPEC+ is set to dominate gains after some OPEC+ members announced they would extend extra voluntary cuts to support market stability. Global supply for 2024 is forecast to increase 800 kb/d to 102.9 mb/d, including a downward adjustment to OPEC+ output,” the report reads.
According to the IEA report, trade flow disruptions also boosted bunker fuel use. Longer shipping routes and faster vessel speeds saw Singapore bunkering reach all-time highs.
That, along with surging US ethane demand for its petrochemical sector, underpins a slight upward revision to global oil demand expectations for this year by 110 kb/d compared to last month’s report.
“World oil demand growth is now forecast at 1.3 mb/d in 2024, down sharply from last year’s 2.3 mb/d expansion,” IEA said in its monthly report.
Iran, which last year ranked as the world’s second-largest source of supply growth after the United States, is expected to increase production by a further 280 kb/d this year. Output policy for the remainder of the OPEC+ bloc will be revisited when ministers meet in Vienna on June 1 to review market conditions.