Commodity Market Report
Macro oils short-term outlook: August 2024
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Report summary
The month of August started with a shift in financial markets to widespread selling, bringing oil prices along with it. Brent fell nearly $3/bbl on Friday 2 August and again fell on Monday 5 August before stabilizing on 7 August near $78/bbl for Dated Brent. We are revising our price forecast in view of the shift down. Risks remain in the outlook due to geopolitical tensions and if demand weakens from our expectations for a 1.5 million b/d increase this year. A slowdown in economic growth in China or the US would undermine demand growth and dampen prices. In this Monthly Update, we examine: • Uncertain demand outlook as the global manufacturing recovery stalls • As expected, US Lower 48 pullback in drilling activity continues to stall growth in 2024; but ongoing efficiency improvements will drive growth through 2026 • Continued strong performance from Guyana’s three FPSOs in June lift our 2024 outlook • OPEC+ continues its commitment to balancing the market
Table of contents
- Geopolitical risk
- Global supply: revisions weighted to the upside as JMMC make no changes to OPEC+ policy
- Non-OPEC supply: outlook driven by upgrades to US, Angola, China and Guyana
- US Lower 48 oil production forecast to reach 11 million b/d in Q4 2024
- Lower 48 well costs are falling, but don’t look for record-breaking deflation
- Changes to oil price take eight to twelve months to impact Lower 48 oil production
- OPEC: OPEC+ continues commitment to balancing the market
- Global demand: Outlook uncertain as the global manufacturing recovery stalls
- Liquids demand by key markets
- Global outlook for 2025 and 2026
- Risks to the outlook
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