Oil Market Report - February 2024

15 February 2024 •Global oil demand growth is losing momentum, with annual gains easing from 2.8 mb/d in 3Q23 to1.8 mb/d in 4Q23. A sharp drop in China underpinned an 830 kb/d decline in global oil demand to102.1 mb/d in the last quarter of 2023. The pace of expansion is set to decelerate further to 1.2 mb/d in2024, compared with 2.3 mb/d last year. China, India and Brazil will continue to dominate gains. •World oil supply in January posted a sharp decline of 1.4 mb/d m-o-m after an Arctic blast shut inproduction in North America and as OPEC+ deepened output cuts. Record output from the US, Brazil,Guyana and Canada will nevertheless help boost non-OPEC+ supply by 1.6 mb/d this year comparedto 2.4 mb/d in 2023, when total global oil supply rose by 2 mb/d to an average 102.1 mb/d. •Refinery throughputs are set to accelerate from a seasonal low of 81.5 mb/d in February. Atlantic Basinactivity will recover from US weather-related disruptions that cut runs by up to 1.7 mb/d, despite a pickupin planned maintenance and as new capacity comes online in the non-OECD. For 2024 as a whole,refinery crude runs are forecast to rise by 1 mb/d to 83.3 mb/d, as a 330 kb/d decline in the OECDmitigates non-OECD gains. •Refining margins recovered from early-January weakness in the Atlantic Basin, led by the US Gulf Coastfollowing the mid-month winter freeze. Although Singapore margins posted a narrow m-o-m gain, the$4.50/bbl increase on average in USGC margins was driven by the late-month rally in cracks that pushedAtlantic Basin margins to their highest level since late September. •Global observed oil stocks plummeted by about 60 mb in January, preliminary data indicate, with on-landinventories falling to their lowest level since at least 2016. In December, global stocks rose by 21.6 mbas a surge in oil on water (+60.7 mb) more than offset draws in on-land inventories (-39 mb). OECDindustry stocks fell by 24.1 mb in December, reflecting declines in all three regions. •Amid intensifying hostilities in the Middle East and North American supply outages, ICE Brent futuresrose by $5/bbl during January-their first monthly gain since September. The forward structure flippedfrom contango to backwardation, as diverted Red Sea tanker traffic congested Asia-Europe supplychains and delayed flows into the Atlantic Basin. At the time of writing, Brent was trading at $83/bbl. Table of contents Winter freeze ............................................................................................................................. 3Demand...................................................................................................................................... 4Overview..................................................................................................................................4OECD......................................................................................................................................5Non-OECD............................................................................................................................... 9Supply...................................................................................................................................... 15Overview................................................................................................................................15OPEC+ crude supply.............................................................................................................16Riyadh calls time on long-scheduled capacity expansion........................................................ 18Non-OPEC +.......................................................................................................................... 21Refining ................................................................................................................................... 26Overview................................................................................................................................26Regional refining developments............................................................................................27Product cracks and refinery margins..................................................................................... 32Stocks ...................................................................................................................................... 37Overview................................................................................................................................37Implied balance..................................................................................................................... 38Recent OECD industry stock changes.................................................................................. 39Other stock developments.....................................................................................................41Strong demand for sanctioned oil reduced st