Oil Market Report - January 2024

18 January 2024 •Global oil demand growth slowed to 1.7 mb/d y-o-y in 4Q23 – well below the 3.2 mb/d rate registeredduring 2Q23-3Q23, mirroring the unwinding of China’s post-pandemic release of travel demand. Growthis projected to ease from 2.3 mb/d in 2023 to 1.2 mb/d in 2024, as macroeconomic headwinds, tighterefficiency standards and an expanding EV fleet compound the baseline effect. •World oil supply is forecast to rise by 1.5 mb/d to a new high of 103.5 mb/d, fuelled by record-settingoutput from the US, Brazil, Guyana and Canada. Non-OPEC+ production will dominate growth this year,accounting for close to 1.5 mb/d. By contrast, OPEC+ supply is expected to hold broadly steady on lastyear, assuming extra voluntary cuts that started this month are phased out gradually in 2Q24. •Divergence in regional refinery profitability narrowed further in December as margins in the Atlantic Basinweakened but strengthened in Singapore. Refinery crude throughputs are forecast to average 83.3 mb/din 2024, overtaking 2018’s record of 82.5 mb/d. However, the disparity between OECD and non-OECDruns will continue to widen, as new capacity starts in the Middle East, Africa, and China. •Russian oil exports rose by 500 kb/d to a nine-month high of 7.8 mb/d in December. Crude shipmentswere up by 240 kb/d m-o-m to 5 mb/d while product flows rose by 260 kb/d. At the same time, estimatedexport revenues slumped to a six-month low of $14.4 billion, as Russian oil price discounts increasedand benchmark oil prices declined. •Global observed oil inventories were down by 8.4 mb in November, to their lowest since July 2022, withcrude oil and middle distillates particularly tight. A decline in oil on water (-12 mb) was partially offset byon-land stock builds (+3.6 mb). Oil products decreased by a substantial 24.6 mb, while crude oil rose by16.2 mb. Preliminary data suggest that global inventories rose in December, as oil on water surged. •Benchmark crude oil futures recovered by around $4/bbl from their mid-December lows as tensions inthe Red Sea reignited geopolitical concerns. Prices declined last month amid comfortable physicalbalances, with record US oil supply making its way into the Atlantic Basin. Fund exchange positioningslumped to its most bearish level in years. At the time of writing, Brent futures were trading at $77/bbl. Table of contents Choppy waters ........................................................................................................................3Red Sea tanker attacks raise supply risks via oil choke points ................................................. 4Demand ...................................................................................................................................6Overview................................................................................................................................6Evolution of 2023 forecast fuel demand growth......................................................................... 7OECD ....................................................................................................................................9Non-OECD...........................................................................................................................12Supply....................................................................................................................................17Overview..............................................................................................................................17OPEC+ crude supply ...........................................................................................................19Russian oil export revenues slide to lowest since June 2023.................................................. 21Angola quits OPEC after 2024 quota dispute .......................................................................... 24Non-OPEC+.........................................................................................................................25US NGLs continue unrelenting growth pace in 2024 ............................................................... 27Refining .................................................................................................................................31Overview..............................................................................................................................31Regional refining developments...........................................................................................32The Middle East, China and Africa set to lead crude throughput growth in 2024.................... 33Will e-fuels challenge conventional refineries in mature markets? .......................................... 36Product cracks and refinery margins ...................................................................................38Stocks...............................................................................................