World oil demand is on pace to grow a solid 1.9 mbd in 2023, 1.6 mbd in 2024 and will likely decelerate to 1mbd in 2025. More than offsetting this is growth in non-OPEC supply, which surged by 2.2 mbd in 2023 and will likely expand by 1.7 mbd in 2024 and 2 mbd in 2025. To keep the oil market balanced, OPEC+ alliance would need to continue to constrain production, which throws a sharp focus on OPEC+’s exit strategy. We expect Saudi Arabia and Russia to extend their voluntary production/export cuts through 1Q24 and unwind 400 kbd of cuts in April. However, a case could be made for choosing higher volumes in order to achieve better optionality in the future. Our Brent forecasts for this year and next have not changed since June and are expected to average $81 for 2023 and $83 in 2024. We also extend our outlook through 2025 with an average Brent price target of $75/bbl.

Speakers

This podcast was recorded on 22 November 23

This communication is provided for information purposes only. Institutional clients can view the related report https://www.jpmm.com/research/content/GPS-4539172-0 and https://www.jpmm.com/research/content/GPS-4567074-0  for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.