Oil traders betting on rising prices are facing a critical moment. This quarter is set to be the tightest of the year for global crude supplies as U.S. demand peaks in the summer and hurricanes threaten U.S. production.
Global stockpiles are set to deplete at an accelerating pace of about 800,000 barrels a day between June and September, the International Energy Agency estimates.
For prominent oil watchers including JPMorgan Chase & Co., BNP Paribas SA and UBS AG, that shortfall should push Brent crude futures to $90 a barrel from $84 now before the end of the quarter.
A rapid drawdown in U.S. inventories, which have fallen by more than 15 million barrels in the past two weeks, indicates that the crisis is indeed underway.
But once the summer slump has passed, fundamentals look set to weaken and could remain subdued for some considerable time.
Global inventories will start to stabilize in the fourth quarter as cooling demand in China grows, the IEA forecasts. China’s economic expansion unexpectedly slowed to its weakest pace in five quarters, refineries returned late from maintenance work and imports faltered.
Oil markets will be in a sizable surplus in early 2025, according to the IEA, and will remain oversupplied throughout the year amid abundant new production from the U.S., Canada, Guyana, Brazil and other non-OPEC producers.
The glut is likely to persist even if the OPEC+ alliance abandons plans to restart halted production. Led by Saudi Arabia, the cartel has withheld substantial volumes of oil over the past two years and last month outlined a tentative roadmap to restore output from the fourth quarter.
Meanwhile, British oil and gas giant BP has predicted that global oil demand will peak in 2025, while wind and solar capacity will continue to grow rapidly. In its latest edition of its annual Energy Outlook, BP has published a study on how the global energy system will evolve through 2050. BP’s forecast is surprising given that it comes from a major player in the oil market. BP’s less optimistic forecasts for oil demand are in line with those of Bloomberg and the International Energy Agency, although they are a far cry from OPEC’s optimistic tone.
By Economic Editor
Angola Portal
2024-07-16 22:34:45