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WTI Near 73$/bbl in 2024 With Demand Growth Falling to 1.2mb/d: Macquarie

OIL

Oil demand growth is forecast to fall to 1.2mb/d in 2024 from 2.4mb/d in 2023 amid macroeconomic concern according to Macquarie. Actual demand growth currently remains “resilient” but risk from 2024 growth and increased downside price volatility.

  • The WTI price forecast has seen a “moderate” decrease to normalize near 73$/bbl next year with OPEC+ cuts appearing to have fallen short of market expectations.
  • “Our balances indicate a slight surplus in 2023 Q4 and looser FY24 amid slowing demand growth and rising supply.”
  • “Responsive non-OPEC supply may continue to challenge the ability of OPEC+ to support price, as the call on OPEC could continue to fall while markets find balance at lower prices than many may anticipate.”
  • A further reduction in Saudi supply into 2024 would not be a shock amid a potential surplus although an eventual “off-ramp” for the cuts is expected.
  • A “healthy pipeline” of long-led time offshore oil capacity in coming years leads a counter-consensus view relative to the structural bull thesis.

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