Macro oils short-term outlook: December 2023 Report

Commodity Market Report 06 December 2023

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Report summary

The oil market reacted to the 30 November 2023 OPEC+ ministerial meeting with a decline in prices, as Brent slid to $80.58/bbl after the announcement. The producers agreed on a voluntary production cut of 2.2 million b/d for Q1 2024, but the market has little expectation for significant adherence to the agreement, mostly because the cuts are voluntary. Highlights of our Monthly Update include: • OPEC+ agreement to have an effect on price • Levels of OPEC+ adherence assumed for Q1 2024 • Surge in oil sands supply supports new production highs in Canada • Severe storms in Black Sea disrupt offshore loadings, impacting Kazakhstan output • Demand growth increasingly shifts towards petrochemicals but focus remains on China

Global Supply: OPEC+ pledges to deepen its planned production cuts for Q1 2024
Non-OPEC: revisions to key US NGLs plays drives downgrades in 2024 and 2025
US Lower 48 production will add more than 850,000 b/d in 2023
- Momentum lost encapsulates the Lower 48 supply outlook for 2024
OPEC: deeper cuts agreed by six OPEC+ members for Q1 2024; Saudi Arabia rolls over 1 million b/d cut
Global demand: Growth increasingly shifts towards petrochemicals but focus remains on China
- Liquids demand by key markets
Global outlook for 2025
Risks to the outlook