- Oil prices fall to $82.71 on demand concerns and IEA warning.
- The IEA forecasts an increase of 1.22 million bpd in 2024 amid rising supply.
- S. oil production exceeds 13 million bpd, capturing a significant milestone in production and its potential impact on the market.
Oil prices saw a marginal decline in Asian trading on Friday. This decline reflects ongoing concerns about demand. The warning from the International Energy Agency (IEA) and the weak economic indicators are to blame. Brent oil futures fell to $82.71 a barrel. West Texas Intermediate crude oil futures also declined to $77.49 a barrel. Despite this, both contracts posted a 1% gain for the week.
The IEA cuts demand in 2024 and forecasts an increase of 1.22 million bpd
The latest IEA report casts a shadow on future demand. It slightly reduced its oil demand growth forecast for 2024. Global demand is now expected to increase by 1.22 million barrels per day. In addition, the IEA predicts an increase in supply, thanks to US production and OPEC's stance. The United States is breaking records in oil production. At the same time, large economies such as the United Kingdom and Japan are facing recessions. Eurozone growth remains stagnant. These factors contribute to a bleak demand outlook. China's economic recovery is slow, although the Lunar New Year may offer brief support.
US oil production exceeds 13 million barrels/day
US inventory data revealed an increase in crude oil reserves. It indicates a strong rebound in production. US production now exceeds 13 million barrels per day. Strong US production could offset OPEC supply gaps and disruptions in the Middle East. The Exxon Mobil, Chevron and Occidental Petroleum deals emphasize low-cost oil fields. These fields remain profitable even when oil prices are low. This strategy can cushion the impact of fluctuating prices and demand.
The oil market continues to be a complex network of supply, demand and geopolitical influences. Current trends suggest cautious navigation in times of uncertainty. However, the industry's adaptability and strategic moves offer a glimpse of resilience amid the challenges.
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