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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends sideways grind below 1.0900
EUR/USD stays in a consolidation phase below 1.0900 following the previous week's rally. In the absence of high-tier data releases, the US Dollar stays resilient against its rivals as investors scrutinize comments from central bank officials.
Gold pulls away from record highs, holds above $2,400
Gold rose sharply at the beginning of the week on escalating geopolitical tensions and touched a new all-time high of $2,450. With market mood improving modestly, XAU/USD erases a majority of its daily gains but manages to hold above $2,400.
GBP/USD holds steady near 1.2700, Fedspeak in focus
GBP/USD fluctuates in a narrow channel near 1.2700 on the first trading day of the week. The cautious market stance helps the US Dollar hold its ground, while market participants assess remarks from central bank officials ahead of this week's key events.
Ripple stays above $0.50 on Monday as firm backs research on blockchain and quantum computing
XRP price holds steady above the $0.50 key support level and edges higher on Monday, trading at 0.5130 and rising 0.70% in the day at the time of writing.
Week ahead: Nvidia results and UK CPI falling back to target
What a week for investors. The Dow Jones reached a record high and closed last week above 40,000, for the first time ever. This is a major bullish signal even though gains for global stocks were fairly modest on Friday, and European stocks closed lower.