Oil prices kept in a narrow range on Wednesday, with the market awaiting news on output cuts from the OPEC+ producers group at the weekend.
In a note on Tuesday, bank analysts said there was little room in the market for additional OPEC oil, adding that they pegged the call-on-OPEC in 2024 at 28.3 million barrels per day (mb/d), flat for the fourth consecutive year.
Bank analysts now assume Saudi Arabia will extend voluntary cuts further to the end of next year’s second quarter, with its production rising only gradually during the second half, but staying below its formal OPEC quota of 10.5 mb/d in that period.
Saudi Arabia, Russia and other members of OPEC+ have already pledged total oil output cuts of 5.16 million barrels per day (bpd), or about 5% of daily global demand, in a series of steps that started in late 2022.
“Although U.S. production slows sharply, non-OPEC supply is still likely to increase by 1.4 mb/d next year, enough to meet all global demand growth,” bank analysts said in Tuesday’s note.
The bank expects oil demand growth to slow in 2024 to about 1.2 mb/d as tailwinds after the COVID-19 pandemic abate and economic growth stays muted, it added.
(Reporting by Anjana Anil in Bengaluru; Editing by Clarence Fernandez)
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