Global Oil Data Deck (January 2024)
Oil market balances loosened further in November as an exaggerated seasonal pullback in demand ran up against flat supply.
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Overview
Global oil market balances loosened further in November to a very minor undersupply as an exaggerated seasonal pullback in demand ran up against steady supply.
While still technically undersupplied according to our latest estimates, the momentum clearly leans toward softer conditions heading into end-2023, which further supports OPEC+’s decision to cut production further beginning January 2024.
Crude prices have remained stubbornly range bound between $76-81/bbl year-to-date in 2024; Brent currently sits at the upper end of that range with apparent upside pressure building.
Both the WTI and Brent futures curves have reverted to steepening backwardation after drifting into contango late last year, with the bulk of spot market pressure coming from a combination of temporary recent supply outages and delayed deliveries stemming from Red Sea crisis rerouting.