SlavkoSereda/iStock via Getty Images
The chief of Saudi Arabia’s state-owned oil company expressed confidence on Monday, projecting a year of strong expansion in global oil demand to reach 104 million barrels, with an increase of approximately 1.5 million barrels.
CEO of Saudi Aramco (ARMCO), Amin Nasser, presented a forecast that falls between recent predictions from OPEC and the International Energy Agency.
Highlighting Aramco’s preparedness to boost capacity if necessary, Nasser stated that the group possesses spare capacity of around 3 million barrels.
As per OPEC+ agreed cuts, current Saudi oil production stands at around 3 million barrels per day below its maximum sustainable capacity of 12 million barrels per day, making it the world’s largest holder of surplus capacity.
In a surprising move last month, Aramco announced the cancellation of plans to escalate production capacity to 13 million barrels per day by 2027.
Prince Abdulaziz bin Salman remarked, “We postponed this investment simply because… we’re transitioning.” He highlighted that Aramco has other investment priorities in sectors including oil, gas, petrochemicals, and renewables.
U.S. crude oil futures experienced marginal change on Monday, marking a sixth consecutive daily gain. In contrast, benchmark Brent crude declined slightly, as the catalysts for the previous week’s substantial increases, such as the Middle East geopolitical risk premium and rising distillate fuel prices, stabilized at the week’s commencement.
Front-month Nymex crude (CL1:COM) for March delivery concluded with a +0.1% at $76.92/bbl, while front-month April Brent crude (CO1:COM) finished at a -0.2% to $82.00/bbl.
ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI)
Morgan Stanley analysts are displaying a more positive outlook for global oil markets in 2024. Recent inventory reductions indicate that the market has been tighter than initially anticipated.
In January, oil inventories experienced a decrease of approximately 1.5 million barrels per day, contrary to Morgan Stanley’s projections, which anticipated minor increases. This was driven by better-than-expected OPEC+ compliance on supply reductions and reduced U.S. crude production due to cold weather.
The bank raised its estimate for 2024 crude demand growth to 1.5 million barrels per day from its prior outlook of 1.3 million barrels per day, and revised its projected Brent price range to $80-$85/bbl from $75-$80/bbl.









