Crude Oil markets to be chronically undersupplied in 2024 - TDS

According to Bart Melek, Head of Commodity Strategy from Toronto-Dominion Securities (TDS), Crude Oil markets could be headed for chronic undersupply heading through 2024 despite Thursday’s widening fossil product overhang.

Inventory surge sends crude oil prices lower

Oil prices sank as a surge in US gasoline and distillate inventories created a fear that demand is on a shaky footing. The largest weekly gain in product stockpiles triggered concerns that US demand is on the slide.

We expect global demand to increase by some 1.2+ million b/d in 2024. At the same time, we hypothesize that Saudi Arabia and its OPEC+ peers will stay true to their commitments to extend the current production cuts, for as long as is needed to lift prices.

We project that the oil market will run a deficit for 2024 as a whole, with balances starting off flat in the first few months of the year and posting significant deficits thereafter.