Scott Olson/Getty Images
Global oil markets could shift to a surplus in early 2024, as demand growth cools, the IEA said.
This year has seen record supply from non-OPEC+ countries like US and Brazil.
Next year, supply is expected to climb to 103.4 million barrels a day, overtaking demand of 102.9 million barrels a day.
World oil markets could flip to a surplus in early 2024, according to the latest monthly report from the International Energy Administration.
That’s because demand growth is expected to cool, outpaced by supply growth led by non-OPEC+ producers like the US and Brazil.
“With demand growth set to slow, the market could shift into surplus at the start of 2024,” the energy watchdog said. “For now, with demand still exceeding available supplies heading into the Northern Hemisphere winter, market balances will remain vulnerable to heightened economic and geopolitical risks – and further volatility ahead.”
World oil supply and demand will soon reach an inflection point.
Global supply has notched a high of 101.8 million barrels a day, helped by record output from US, Brazil and Guyana.
Meanwhile, demand is expected to clock in at 102 million barrels a day by the end of 2023 as demand from China hits record highs, according to the IEA.
Then next year, supply is expected to climb to 103.4 million barrels a day, overtaking demand of 102.9 million barrels a day.
“This year’s surge will take world oil demand to 102 mb/d before growth eases to 930 kb/d in 2024 as the last phase of the pandemic economic rebound dissipates and as advancing energy efficiency gains, expanding electric vehicle fleets and structural factors reassert themselves,” the report stated.
The market faced a deficit since this summer after OPEC+ countries like Saudi Arabia and Russia slashed production to prop up oil prices.
That tightness hasn’t dissipated yet,the market is likely to stay in a deficit through the end of the year with OPEC+ countries sticking to production cuts.