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OPEC+ Cut Compliance Would See Narrow Stock Draws in 2024

OIL

Full OPEC+ compliance with voluntary cuts would result in a decline in global stocks by less than 350kb/d in 1H 2024 and 700kb/d for next year according to RBC Capital Markets.

  • “Prices will likely remain volatile and potentially directionless until the market sees clear data points pertaining to the voluntary output cuts.”
  • The market is expected to be driven more by supply-side forces than demand-side in 2024 but with bearish demand surprises in the year ahead.
  • Non-OPEC production from Canada, US, Brazil and Guyana will have grown almost 1.9mb/d between when Saudi Arabia implement the unilateral cut in mid-2023 and the end of 2024. Supply surge fears exist with non-OPEC production unlikely to taper.

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