BAKU, Azerbaijan, May 20. The oil market balance is expected to experience a deficit of 0.2 million barrels per day (mb/d) in 2023, followed by a surplus of 0.1 mb/d in 2024, Trend reports.
The forecast of the Oxford Institute of Energy Studies (OIES) for 2023 remains relatively unchanged from the previous month, with a small deficit of 210 000 barrels per day. However, the balance for 2024 has been revised upwards by 240 kb/d to a small surplus of 100 kb/d.
Although the supply and demand gap in both years is near balance, recent developments have led to weakened supply/demand prospects, resulting in a growing surplus of 500 kb/d. The focus is now shifting towards the 2024 balances.
The forecast for global oil demand growth remains steady, with a projected increase of 1.6 mb/d in 2023 and 1.7 mb/d in 2024. The stronger-than-anticipated turnaround in China's first quarter has boosted non-OECD growth for 2023 to 1.5 mb/d, up from 1.3 mb/d last month. This compensates for softer OECD growth, which has been revised down to 140 kb/d from 300 kb/d.
The downward revision of OECD growth is primarily driven by reduced demand in the United States. It is expected that US demand will slightly contract by 84 kb/d in 2023 before returning to growth with 185 kb/d in 2024. On the other hand, China's oil demand growth in 2023 has been revised upwards by 140 kb/d to 790 kb/d, reflecting strong actuals in the first quarter. However, caution remains for the second half of the year as China's economic recovery remains uneven.
India's robust macro performance and increased intake of affordable Russian crude continue to support the demand outlook for 2023, resulting in a small year-on-year increase to 250 kb/d from the previous 210 kb/d. Regarding specific products, jet fuel demand growth has been further upgraded by 110 kb/d to reach 1 mb/d in 2023, accounting for approximately 60 percent of total gains. This adjustment compensates for the downgrade of 150 kb/d in LPG demand due to weakness observed in the first quarter.
The evolving oil market dynamics and the interplay between global economic factors and regional demands are expected to shape the future outlook. As the industry monitors these developments closely, experts remain vigilant to adjust their forecasts accordingly.