OPEC's latest monthly report hints at a tough 2024 - and further supply cuts to come

Just hours before the COP28 summit ended with the historic agreement to phase out fossil fuels, OPEC+ released its latest monthly oil market report on November 13^th.

The report said that global oil market fundamentals “remain strong” despite “exaggerated negative sentiments”.

Demand stagnating as oil prices stall

Nevertheless, demand for oil appears to have stalled, with November 2023’s world oil demand sitting at 2.5 million barrels per day – unchanged from the November 2022 rate. For 2024, world oil demand is expected to be lower than this at 2.2 million barrels per day, unchanged from the previous October 2023 assessment.

In the report, OPEC hinted at continued pressures on industry in 2024 leading to lower oil prices and, possibly, demand:

In a paragraph rich with irony, OPEC also described some of its biggest expected areas for liquid supply growth in 2024 to include the United States, Canada and Norway – some of most outspoken advocates against the ‘reduction’ of fossil fuels compared to a ‘phase out’ in the COP28 agreement.

OPEC production cuts coming in 2024?

When it came to the oil price, the report’s feature article hinted that further OPEC production cuts may be coming, in order to balance world supply and demand:

The feature article went on to praise OPEC+ for maintaining price stability, saying that: