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Toril Busoni, head of the Oil Markets Department at the International Energy Agency, said on Tuesday that the global oil market will record a slight surplus in 2024 even if OPEC+ countries extend their cuts until next year.
But Busoni added that the oil market is currently experiencing a deficit and that inventories are declining “at a rapid rate.”
According to Reuters, “Global oil inventories are at low levels, which means that we face the risk of increased volatility if surprises related to demand or supply occur.”
Three OPEC+ sources said that OPEC+ is scheduled to consider whether to make additional cuts in oil supplies when it meets later this month, after prices fell by about 16% since late September.
The price of oil fell to about $82 per barrel for Brent crude from its highest levels in 2023 in September, near $98. Concerns about demand and a potential surplus next year are putting pressure on prices, despite support from OPEC+ cuts and conflict in the Middle East.
Saudi Arabia, Russia and other members of OPEC+ have already pledged to reduce total oil production by 5.16 million barrels per day, or about 5% of daily global demand, as part of a series of steps that began in late 2022.
The cuts include 3.66 million barrels per day from OPEC+ and additional voluntary cuts by Saudi Arabia and Russia.
At its last policy meeting in June, OPEC+ agreed to a broad agreement to limit supplies until 2024, and Saudi Arabia pledged a voluntary reduction in production for July by one million barrels per day, which has since been extended until the end of 2023.
Brent crude futures fell 34 cents, or 0.4%, to $81.98 per barrel by 1134 GMT.