Oil Market Report - March 2024

14 March 2024 •Global oil demand is forecast to rise by a higher-than-expected 1.7 mb/d in 1Q24 on animproved outlook for the United States and increased bunkering. While 2024 growth hasbeen revised up by 110 kb/d from last month’sReport, the pace of expansion is on track toslow from 2.3 mb/d in 2023 to 1.3 mb/d, as demand growth returns to its historical trendwhile efficiency gains and EVs reduce use. •World oil production is projected to fall by 870 kb/d in 1Q24 vs 4Q23 due to heavy weather-relatedshut-ins and new curbs from the OPEC+bloc.From the second quarter,non-OPEC+ is set to dominate gains after some OPEC+ members announced they wouldextend extra voluntary cuts to support market stability. Global supply for 2024 is forecastto increase 800 kb/d to 102.9 mb/d, including a downward adjustment to OPEC+ output. •Refinery crude runs are forecast to rise from a February-low of 81.4 mb/d to a summerpeak of 85.6 mb/d in August. For the year as a whole, throughputs are projected to increaseby 1.2 mb/d to average 83.5 mb/d, driven by the Middle East, Africa and Asia. Refiningmargins improved through mid-February before receding, with the US Midcontinent andGulf Coast as well as Europe leading the gains. •Global observed oil inventories surged by 47.1 mb in February. Offshore stocks dominatedgains as seaborne exports reached an all-time high and shipping disruptions through theRed Sea tied up significant volumes of oil on water while onshore inventories declined.Globalstocks plunged by 48.1 mb in January,with OECD industry stocks at a16-monthlow. •ICE Brent futures rose by $2/bbl during February as ongoing Houthi shipping attacks in theRed Sea kept a firm bid under crude prices. With oil tankers taking the longer route aroundAfrica more oil was kept on water, further tightening the Atlantic Basin market and sendingcrude’s forward price structure deeper into backwardation. At the time of writing, Brent wastrading at $83/bbl. Tables of contents Oil on water ............................................................................................................................... 3 Demand...................................................................................................................................... 4 Overview ................................................................................................................................. 4Sea change in shipping boosts bunker demand ..................................................................... 5OECD ...................................................................................................................................... 6Non-OECD ............................................................................................................................ 10 Supply...................................................................................................................................... 14 Overview ............................................................................................................................... 14OPEC+ crude supply ............................................................................................................ 15OPEC+ cuts extended........................................................................................................... 19Non-OPEC+ .......................................................................................................................... 19 Refining ................................................................................................................................... 25 Overview ............................................................................................................................... 25Regional refining developments ........................................................................................... 26Product cracks and refinery margins .................................................................................... 31 Stocks ...................................................................................................................................... 37 Overview ............................................................................................................................... 37Implied balance ..................................................................................................................... 38Recent OECD industry stock changes ................................................................................. 39Other stock developments .................................................................................................... 41Oil on water surges on increased exports and longer travel routes...................................... 42 Overview ............................................................................................................................... 46Futures markets ....................................................