BAKU, Azerbaijan, June 20. Oil market is expected to fall into deeper deficit in 2024 with an increased surplus for 2025, Trend reports with reference to the Oxford Institute of Energy Studies (OIES).
The projected deficit for 2024 has been widened by 340,000 barrels per day (kb/d) to -720 kb/d, while the expected surplus for 2025 has been raised by 380 kb/d to 740 kb/d.
These adjustments reflect recent decisions by the eight-OPEC+ group to extend voluntary cuts of 2.2 million barrels per day (mb/d) through the third quarter of 2024, followed by a gradual phase-out of these cuts from the fourth quarter of 2024 to the third quarter of 2025. As a result, the global oil market is now anticipated to shift from a small 80 kb/d deficit previously projected for the second half of 2024 to a deficit of 1.4 mb/d. This contrasts with earlier assumptions of a complete return to pre-cut levels by the third quarter of 2024.
Looking ahead to 2025, the Oxford Institute of Energy Studies has adjusted its forecast, eliminating the previously anticipated surplus of 210 kb/d in the first quarter. Instead, the market is expected to remain near balance with a slight surplus of 50 kb/d, before transitioning to surpluses averaging 970 kb/d from the second quarter onwards. This represents an increase from last month's forecast of 440 kb/d.
The projections take into account an anticipated increase in OPEC+ output by 2.48 mb/d from September 2024 to September 2025, which includes a phased-in base production upgrade of 300 kb/d for the UAE throughout the next year.
Additionally, reported OECD commercial stocks were revised lower by 5 million barrels in April, standing at 94.7 million barrels below their five-year average despite a significant month-on-month increase of 32 million barrels. The Oxford Institute of Energy Studies now expects OECD commercial stocks to begin drawing down from June onwards, potentially reaching levels 100-150 million barrels below the average throughout most of the first half of 2025, before stabilizing closer to average levels in the second half of the year.
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