KAPSARC – Oil Market Outlook, 2Q 2024

The second quarter of 2024 sees an oil demand growth of 940 Kb/d, with OECD countries recovering from last quarter's decline and non-OECD countries continuing their growth. The Middle East, led by Saudi Arabia, experiences the most significant growth due to increased liquid consumption for cooling. On the supply side, OPEC+ contributes to a modest growth, while non-OPEC+ countries like Canada are expected to see declines. The oil market is projected to remain in a deficit of around 1.3 MMb/d, potentially leading to higher prices and energy CPI. Despite this, the U.S. Federal Reserve Bank officials have adopted a cautious but optimistic stance, indicating the need for rate cuts in 2024 but reducing the number of expected cuts from four to three.