Worries about Global Economy and Oversupply are Weighing on Oil Prices — FT

As oil market sentiment further deteriorates, global banks start to cut forecasts. Hedge funds continue to actively reduce longs, while the U.S. actively increases crude production and buys more oil for its strategic reserves, SPRs.

Meanwhile, International Energy Agency, IEA, raised its estimate of global oil demand growth in 2024 by 180 thousand bpd to 1.24 mln bpd. bpd to 1.24 mln bpd. Global oil supply in 2023 rose by 1.9 mln bpd, while in 2024 it is expected to grow by 1.5 mln bpd ahead of demand growth. Global oil supply is expected to reach a record 103.5 mln b/d in 2024 with a new record of 103.5 mln b/d to be reached because of the U.S., Brazil, Guyana and Canada pumping up like never before.

OPEC+ countries in December lagged behind the joint oil production plan by 390 thousand bpd (excluding Angola). IEA further expects a decrease in oil demand growth in 2024 to 1.2 mln bpd from 2.3 mln bpd in 2023. Interestingly, oil exports from Russia in December increased by 500 thsd bpd and reached the highest level for the last three years and reached a 9-month-high even though Russian oil export revenues in December fell to a 6-month low due to an increase in Urals discount and a general decline in Brent prices.