Macro oils short-term outlook: September 2024 Report

Commodity Market Report 06 September 2024

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Report summary

The oil market weakened in August and early September due largely to a continued focus on potential weak demand in China. With prices falling into the low to mid $70s/bbl area for Dated Brent, on 5 September 2024 OPEC+ agreed to delay the easing in production cuts to 1 December 2024. In view of the recent weakness in prices, we have adjusted our base case in this monthly update to assume that OPEC+ delays the start of easing production cuts until Q2 2025, when output will begin returning to the market and continue to do so through the end of 2025.

2025-2026
Alternative Case for OPEC+
Political Risk
Global supply: non-OPEC supply remains buoyant as attention turns to a change in OPEC+ policy
- Non-OPEC supply: outlook driven by upgrades to US NGLs and Lower 48
- US Lower 48 oil production will grow annually at 3% through 2025
- Consolidation continues beyond the Permian to boost efficiency and bring synergies
- Fewer rigs doesn’t mean less production, as operators boost output through efficiency
- OPEC: we assume OPEC+ delay unwinding of cuts until Q2 2025
- Global demand: Despite sluggish global manufacturing, petrochemical growth strengthens this year
- Liquids demand by key markets
- China
- United States
- Europe
- Global outlook for 2025 and 2026
- Risks to the outlook