KAPSARC – Oil Market Outlook

The KAPSARC Oil Market Outlook report provides an analysis of the current state of the oil market, with a focus on demand and supply dynamics. The report highlights muted quarter-on-quarter growth in OECD countries, while non-OECD countries experienced greater growth. Concerns about monetary tightening policies and the weakening signs from the US economy suggest challenging times may lie ahead. OECD demand is expected to decline by 400 thousand barrels per day, while non-OECD demand is expected to increase by around 650 thousand barrels per day. On the supply side, the report predicts declining production in the first quarter, attributed to extended and additional voluntary cuts by OPEC and other oil-producing countries. Brazil's seasonal decline in biofuels production also plays a role in the supply decline. As a result, the market is projected to remain in a deficit of around 1.2 million barrels per day this quarter. Looking ahead, the report forecasts a year-on-year increase in global oil consumption, reaching 102.9 million barrels per day by 2024. The growth rate is expected to accelerate in 2025, taking into account the uncertain economic outlook in China and the Middle East, as well as potential issues in the US economy. However, the global economy is still under strain, with governments cutting spending and geopolitical tensions escalating, suggesting a stronger recovery is more likely to be reflected in 2025 rather than 2024.