Snapshot of global oil supply and demand: January 2024

February 23, 2024Brent crude oil prices rose in January, increasing by USD2.5/bbl m-o-m to USD80.1/bbl. Prices rose due to stronger-than-expected economic growth in the US and supply chain concerns in West Asia

• Global oil demand. Global liquids demand decreased m-o-m by 2.6 MMb/d to 100.4 MMb/d. The decline was driven by Europe and China, where demand decreased m-o-m by 0.8 MMb/d and 0.6 MMb/d, respectively
• OPEC 10 production (excl. Iran, Venezuela, Libya). OPEC 10’s production decreased slightly, by 0.1 MMb/d m-o-m to 26.9 MMb/d. OPEC’s production has declined by 1.97 MMb/d since January 2023 as it continues to curtail supply, with added uncertainty due to geopolitical tension in Iran
• Non-OPEC production (excl. US shale). Non-OPEC production decreased by 0.9 MMb/d m-o-m to 60.1 MMb/d. The decline was primarily driven by US non-shale onshore production, which witnessed a m-o-m decline of 0.5 MMb/d due to extreme cold weather disruptions
• US shale oil production. US shale oil production declined sharply by 0.5 MMb/d m-o-m in January to 9.3 MMb/d as a result of shut-downs due to cold weather across central US. The number of active rigs has slightly decreased to 552 in January (down by 3 m-o-m and down by 147 since the start of 2023)
• Iran, Venezuela, Libya production. Combined production levels in Iran, Venezuela, and Libya declined slightly m-o-m, averaging at ~5 MMb/d for the month of January with only a marginal 0.2-MMb/d change in production from the three countries
• Commercial inventories.¹ Global commercial inventories increased by ~23 million barrels in January to 4.5 billion barrels with the increase in inventories primarily attributed to non-OECD countries
• Market sentiment. Despite ongoing OPEC+ crude supply cuts and concerns over disruptions in oil flows, benchmark oil prices have remained relatively stable since the start of 2023, ranging between $75-95/bbl. Oil prices have not been significantly impacted by conflicts in the Middle East so far, as there have not been major disruptions to supply. However, several major oil tanker companies are pausing and rerouting traffic toward the Red Sea as a result of missile attacks, lengthening voyages and potentially delaying cargoes.

_{1 Non-OECD share of inventories is estimated, assuming that non-OECD inventories have 50% days of demand cover of OECD inventories}