The Organization of the Petroleum Exporting Countries (OPEC) has published its Monthly Oil Market Report for October 2024, offering a comprehensive update on the global oil market’s key trends and dynamics.
Crude Oil Price Trends In September 2024, OPEC’s Reference Basket (ORB) price fell by $4.82 per barrel, a 6.1% decline, bringing the average price to $73.59 per barrel. Similarly, the ICE Brent front-month contract dropped by $6.01, or 7.6%, averaging $72.87 per barrel. The NYMEX WTI front-month contract saw an 8% decline, falling by $6.06 to an average of $69.37 per barrel. The GME Oman front-month contract also decreased, down by $4.63, or 6%, to average $72.91 per barrel. The price spread between ICE Brent and NYMEX WTI widened slightly by 5 cents to an average of $3.50 per barrel in September.
Despite some flattening of oil futures forward curves, backwardation remained in place. Market sentiment shifted as money managers turned more bearish on oil futures, taking net short positions in the ICE Brent contract.
Global Economic Outlook OPEC maintained its forecast for global economic growth, keeping it at 3.0% for 2024 and 2.9% for 2025. Growth expectations for the U.S. were revised slightly higher to 2.5% for 2024 due to better-than-expected performance in the first half of the year. The 2025 forecast remains unchanged at 1.9%. Japan’s 2024 growth was adjusted down to 0.1%, reflecting slight downward revisions in its first-half numbers, but its 2025 outlook remains at 0.9%. The Eurozone’s economic growth predictions hold steady at 0.8% for 2024 and 1.2% for 2025, while China and India’s forecasts remain unchanged at 4.9% and 6.8% for 2024, respectively. Brazil’s economic outlook for 2024 was revised up to 2.5%, driven by robust economic activity, with 2025’s forecast steady at 1.9%. Russia’s forecasts also remain unchanged at 3.2% for 2024 and 1.5% for 2025.
World Oil Demand OPEC revised its global oil demand growth forecast for 2024 downward by 106 thousand barrels per day (tb/d), now expecting an increase of 1.9 million barrels per day (mb/d). This is still higher than the pre-pandemic average of 1.4 mb/d. Demand from OECD countries is projected to rise by over 0.1 mb/d in 2024, led by the Americas, while non-OECD demand is expected to grow by 1.8 mb/d. For 2025, OPEC also revised its demand forecast downward by 102 tb/d, projecting an increase of 1.6 mb/d. Non-OECD countries, particularly China, India, and other Asian nations, are expected to lead demand growth, while OECD demand will rise modestly by around 0.1 mb/d.
Global Oil Supply The forecast for liquids supply from non-DoC (non-participating Declaration of Cooperation) countries remains unchanged, with expected growth of 1.2 mb/d in 2024. The main contributors to this growth include the U.S., Canada, Brazil, and China. Similarly, the supply growth forecast for 2025 stands at 1.1 mb/d. Increases in supply are anticipated from the U.S., Brazil, Canada, and Norway. Natural gas liquids (NGLs) and non-conventional liquids from DoC countries are forecast to grow by 0.1 mb/d in 2024, reaching 8.3 mb/d, followed by an additional increase of 70 tb/d in 2025 to 8.4 mb/d. OPEC crude oil production from DoC countries fell by 0.56 mb/d in September, averaging 40.10 mb/d.
Refining Operations and Product Markets Refinery margins declined across regions in September due to ample product availability. Most losses came from the gasoline and middle distillates markets. In the U.S. Gulf Coast, the end of the summer driving season and high refinery runs led to weaker product margins, especially for gasoline. Despite lower U.S. product inventories, gasoline margins experienced the sharpest decline. In Europe, closed arbitrage for gasoline, robust diesel imports, and weak air travel demand hurt refining economics, though naphtha and fuel oil prices strengthened. In Singapore, crack spreads for all products, except naphtha, declined. The release of additional Chinese product export quotas increased pressure on an already oversupplied market, particularly for gasoil.
Tanker Market Dirty spot freight rates improved for VLCCs and Suezmax tankers in September, while Aframax rates weakened. VLCC rates on the Middle East-to-East route rose by 6%, and rates on the West Africa-to-East route increased by 4%. Suezmax rates on the U.S. Gulf Coast-to-Europe route edged up by 2%, while Aframax rates on the Caribbean-to-U.S. East Coast route dropped by 16%, and cross-Mediterranean rates fell by 12%. Despite mixed monthly performance, all tanker classes saw higher rates compared to the same period last year. Clean spot freight rates declined across most routes, except for the Middle East-to-East route, which rose by 10%.
Crude and Refined Product Trade Preliminary data for September shows U.S. crude exports remained below 4 mb/d for the second consecutive month. U.S. crude imports rose to an average of 6.6 mb/d, while product imports fell to their lowest level since 1997. U.S. product exports remained near record highs, close to 6.9 mb/d. In OECD Europe, crude imports declined amid refinery maintenance, while product imports remained stable. Japan’s crude imports reached a four-month high in August, averaging 2.3 mb/d, with product imports also increasing for the second straight month. China’s crude imports rebounded in August, rising by 16% month-on-month (m-o-m) to 11.6 mb/d, although they were still down 7% year-on-year (y-o-y). India’s crude imports increased by 6% in August, while its product imports and exports both fell by 2%.
Commercial Stock Movements Preliminary data from August 2024 shows OECD commercial oil stocks fell by 8.4 mb, month-on-month, bringing total stocks to 2,828 mb. This is 157 mb below the 2015–2019 average. Crude and product stocks decreased by 6.5 mb and 1.9 mb, respectively. OECD crude stocks now stand at 1,319 mb, 128 mb below the five-year average. Product stocks are at 1,511 mb, which is 29 mb below the average. In terms of forward cover, OECD stocks fell slightly in August to 61.3 days, 1.8 days below the five-year average.
Supply and Demand Balance The demand for crude from DoC countries is revised down by 0.1 mb/d for 2024, bringing the total to 42.8 mb/d, about 0.6 mb/d higher than in 2023. The demand for DoC crude in 2025 is also revised down by 0.2 mb/d, bringing the forecast to 43.2 mb/d, an increase of 0.5 mb/d from 2024.
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