OPEC sees non-OPEC supply hitting demand for its crude through 2024

OPEC is revising down estimates of demand for its crude, amid expectations of growing non-OPEC supply in 2023 and 2024.

In its monthly oil market report, the group said that the call on OPEC crude will be 29.1 million b/d in 2023, and 29.9 million b/d in 2024 -- both estimates down 100,000 b/d from last month's report. The call on OPEC crude is the volume the bloc would have to pump in order to balance global oil supply with demand.

Meanwhile, OPEC has increased its estimates for non-OPEC supply every month since July, with the US, Brazil, Norway, Kazakhstan, Guyana and China expected to support growing supply outside the bloc.

OPEC now sees non-OPEC liquids output growing by 1.7 million b/d on the year to 67.5 million b/d in 2023. It sees 2024 non-OPEC supply growing 1.4 million b/d to average 68.9 million b/d.

This growth comes as several OPEC countries are implementing heavy production cuts under the current OPEC+ agreement.

OPEC said that its output grew by 273,000 b/d on the month to average 27.75 million b/d in September, according to an average of available secondary source estimates.

The producer group estimates that global oil supply was flat month on month at 100.6 million b/d last month, down 500,000 b/d on September 2022.

OPEC estimated OECD commercial crude stocks at 1.348 million barrels in August, down 30,000 barrels year on year, and 43,000 barrels below the latest five-year average.

Demand expectations

OPEC maintained its forecasts for world oil demand growth in 2023 and 2024.

It sees oil demand growing by 2.44 million b/d to 102.06 million b/d in 2023, and 2.25 million b/d to 104.31 million b/d in 2024.

In contrast, the International Energy Agency has trimmedits 2024 oil demand estimate by 76,000 b/d to 102.7 million b/d. It sees global oil demand increasing by 2.3 million b/d to 101.9 million b/d in 2023.

Divergences in forecasts reflect current market uncertainty. Concerns over the strength of the Chinese economy and recessionary forces in Europe are complicating demand forecasts into 2024. Geopolitical factors, including Russia's ongoing invasion of Ukraine and the Israel-Hamas conflict, are also raising the risk of supply disruptions or new sanctions, further complicating forecasts.

OPEC+ has not yet indicated that it will amend its policy as a result of the conflict in Israel. Several OPEC+ officials have said that they are closely watching the market for any impact and are ready to take additional measures to support market stability if required. The next OPEC+ meeting is scheduled for Nov. 26 in Vienna. The group also has the option to call extraordinary meetings.