In March, the OPEC Reference Basket (ORB) value increased by $2.99, or 3.7%, m-o-m, to average $84.22/b. Oil futures prices averaged higher, with the ICE Brent front-month contract rising by $2.95, or 3.6%, m-o-m, to $84.67/b, and the NYMEX WTI front-month contract up by $3.80, or 5.0%, m-o-m, to average at $80.41/b. The DME Oman front-month contract rose by $3.30, or 4.1%, m-o-m, to settle at $84.25/b. The front-month ICE Brent/NYMEX WTI spread narrowed further by 85¢ to average $4.26/b. The market structures of oil futures prices strengthened and remained in backwardation as money managers turned increasingly bullish about oil.xx

The world economic growth forecasts for 2024 and 2025 remain unchanged at 2.8% and 2.9%, respectively. In the United States, economic growth for 2024 is revised up slightly to 2.1%, as the healthy momentum from 2H23 is expected to carry into 2024, while the forecast for 2025 remains at 1.7%. The economic growth forecast for the Eurozone remains at 0.5% for 2024 and 1.2% for 2025. Japan’s economic growth forecast is also unchanged at 0.8% in 2024 and 1% in 2025. Meanwhile, China’s economic growth forecast remains at 4.8% in 2024 and 4.6% in 2025. India’s economic growth forecast is unchanged at 6.6% for 2024 and 6.3% for 2025. Brazil’s economic growth forecast remains at 1.6% for 2024, and 1.9% for 2025. The ongoing robust performance of Russia’s economy leads to upward revisions for both the 2024 and 2025 growth forecasts, now standing at 2% and 1.4%, respectively.

The global oil demand growth forecast for 2024 remains broadly unchanged from last month’s assessment of 2.2 mb/d. Slight adjustments were made to the 1Q24 data, with a slight upward revision in OECD Europe and some non-OECD data, reflecting better-than-expected performance in oil demand data. This increase was offset by a downward revision to Africa in 1Q24 and the Middle East in the first three quarters. Accordingly, the OECD is projected to expand by around 0.3 mb/d and the non-OECD by about 2.0 mb/d. In 2025, global oil demand is expected to see robust growth of 1.8 mb/d, y-o-y. The OECD is expected to grow by 0.1 mb/d, y-o-y, while demand in the non-OECD is forecast to increase by 1.7 mb/d.

The non-DoC liquids supply (i.e. liquids supply from countries not participating in the Declaration of Cooperation) is expected to grow by 1.2 mb/d in 2024, revised down from the previous month’s assessment by about 0.1 mb/d. In 2024, the main drivers for liquids supply growth are expected to be the US, Canada, Brazil and Norway. The non-DoC liquids supply growth in 2025 is expected at 1.1 mb/d, revised down by 0.1 mb/d from the previous month’s assessment. The growth is mainly driven by the US, Brazil, Canada and Norway.

The term “non-DoC liquids supply” is established to better reflect the current breakdown of global liquids supply into DoC and non-DoC. 

The non-OPEC liquids supply (including the 10 non-OPEC countries participating in DoC) in 2024 is expected to grow by 1.0 mb/d, revised down from the previous month’s assessment by about 0.1 mb/d. The main drivers for liquids supply growth are expected to be the US, Canada, Brazil and Norway. The forecast for non-OPEC liquids supply growth in 2025 stands at 1.3 mb/d, revised down by 0.1 mb/d from the previous month’s assessment. The growth is mainly driven by the US, Brazil, Canada, Russia, Kazakhstan and Norway. 

Indeed, crude production levels/growths for countries participating in DoC (including Azerbaijan, Bahrain, Brunei Darussalam, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan) are subject to their DoC production adjustments in 2024 and 2025. 

Separately, OPEC natural gas liquids (NGLs) and non-conventional liquids are forecast to grow by around 64 tb/d to average 5.5 mb/d this year, followed by a growth of 110 tb/d to average 5.6 mb/d in 2025. OPEC-12 crude oil production in March increased by 3 tb/d, m-o-m, averaging 26.60 mb/d, as reported by available secondary sources.

In March, refining margins declined, with significant products stock builds reported during the month in several trading hubs, with middle distillates representing the main source of the weakness. A softer refinery maintenance season y-o-y, as well as limited overall product requirements and high product supplies from Asia and the Middle East, partly offset the seasonal contraction in product balances expected at this time of the year. Additionally, the strength in feedstock prices observed in March likely further weighed on refining economics. Global refinery intake reversed course and increased 230 tb/d in March, m-o-m, to average 79.8 mb/d, but remained 600 tb/d lower, y-o-y.

Dirty freight rates were relatively steady in March on most monitored routes. VLCC spot freight rates on the Middle East to East route were unchanged, m-o-m, although down 20% compared to the same month last year. Suezmax spot freight rates fell 4%, m-o-m, in the Atlantic Basin. Aframax rates saw mixed movement, up 6%, m-o-m, in the Indonesia-to-East route, but with an outsized drop of 19%, m-o-m, on the Caribbean to US East Coast route. The clean market was also mixed, with East of Suez spot freight rates declining 8%, m-o-m, while West of Suez rates rose 10%, m-o-m, supported by gains on the Mediterranean routes.

Preliminary data shows that US crude imports averaged 6.3 mb/d in March, representing a decline of over 5%, m-o-m. US crude exports also fell, dropping 11%, m-o-m, to average 4.1 mb/d. US product exports were in line with the previous month at 6.4 mb/d. The latest data for China shows crude imports averaged 11.1 mb/d in February, representing an increase of 7%, m-o-m, while product exports averaged 1.1 mb/d, indicating a decline of more than 33% from the high levels seen last year. India's crude imports in February experienced an 11% m-o-m drop to stand at 4.5 mb/d, while products exports recovered most of the previous month’s decline, rebounding 18% to 1.4 mb/d. Japan's crude imports in February were broadly unchanged from the previous month at 2.4 mb/d, but still 10% lower, y-o-y. Product flows into Japan, including LPG, fell by 11%, m-o-m, to average 886 tb/d in February, with declines across most major products. Preliminary estimates expect OECD Europe crude imports to remain relatively high in 1Q24 compared to the same quarter of last year. Product imports into OECD Europe are seen increasing, driven by higher diesel inflows.

Preliminary February 2024 data shows total OECD commercial oil stocks down by 25.7 mb, m-o-m. At 2,733 mb, they were 187 mb below the 2015–2019 average. Within the components, crude stocks rose by 19.6 mb, while product stocks fell by 45.3 mb, m-o-m. OECD commercial crude stocks stood at 1,342 mb in February, 106 mb lower than the 2015–2019 average. OECD total product stocks in February stood at 1,391 mb, 81 mb below the 2015–2019 average. In terms of days of forward cover, OECD commercial stocks dropped by 0.4 days, m-o-m, in February 2024 to stand at 59.8 days. This is 2.8 days less than the 2015–2019 average.

Demand for DoC crude (i.e. crude from countries participating in the Declaration of Cooperation) is projected to stand at about 43.2 mb/d in 2024, which is around 0.9 mb/d higher than the estimated level for 2023. Demand for DoC crude in 2025 is expected to reach about 44.0 mb/d, an increase of about 0.8 mb/d over the forecast 2024 level.

Demand for OPEC crude in 2024 is projected to stand at about 28.5 mb/d, which is around 1.2 mb/d higher than the estimated level for 2023. Demand for OPEC crude in 2025 is expected to reach about 29.0 mb/d, an increase of about 0.4 mb/d over the forecast 2024 level.