The Outlook for the Oil Market in 2024: Ongoing Supply Concerns and Potential Transformations

26 December 2023 - 473 views

Experts have warned that the oil market could experience significant changes in 2024 due to ongoing supply concerns. This year, crude prices have fallen by around 35% due to booming US oil production and uncertain global demand. Key factors to watch include OPEC production cuts, the US oil boom, market share wars, and oil demand, which is projected to grow at a slower rate compared to previous years. However, long-term improvements in oil demand are expected.

[Mixed Scenario]
[Significance: Medium]

1. Oil markets are expected to experience major shifts in 2024 due to ongoing supply concerns and fluctuating demand, especially in the Middle East and China.
2. OPEC plans to cut crude production by 2.2 million barrels per day in Q1 2024, with potential extensions. However, supply cuts may not have a significant effect as non-OPEC suppliers fill the gaps.
3. The US oil boom is set to continue, with domestic production projected to reach an average of 13.3 million barrels per day next year. Energy giants like Exxon Mobil and Chevron are increasing production capacity.
4. A potential market share war could arise as Saudi Arabia floods the oil market to drive prices down, potentially causing US producers to reduce their market share. However, some experts dismiss this scenario.
5. Oil demand is expected to grow in 2024, but at a slower rate compared to previous years. China is a key driver of demand growth, while long-term forecasts suggest that oil demand will continue to improve over the next decade.