The US heads into 2024 producing more oil than any country in history, leading strong non-OPEC+ supply growth that exceeds the rising global demand, according to the latest oil markets outlook by S&P Global Commodity Insights.
Fourth-quarter 2023 US total liquids production stands at 21.4 million b/d, of which 13.3 million b/d is crude and condensate with the balance composed of natural gas liquids and biofuels. Both totals are global records. At the same time, both Brazil and Canada are poised to achieve their highest production levels in history. All three nations are on track to establish new national highs again in 2024.
"Not only is the US producing more oil than any country in history, but the amount of oil (crude oil, refined products, and natural gas liquids) that it is exporting is near the total production of Saudi Arabia or Russia. When you look back on 2008—when US production was at a 62-year low, and exports were zero—it is a remarkable turnaround," said Jim Burkhard, vice-president and head of research for oil markets, energy and mobility, S&P Global Commodity Insights.
While global crude oil demand is expected to reach a record high in 2024, the growth in supply is predicted to easily meet this demand. S&P Global Commodity Insights forecasts non-OPEC+ liquids supply growth to increase by 2.7 million b/d in 2024, surpassing total demand growth of 1.6 million b/d.
The growth in non-OPEC+ production coupled with OPEC+ supply restraint sets the 2024 stage for oil prices of $75-100/bbl for Dated Brent, the analysis says.
"Oil markets are heading into 2024 with a new equilibrium. OPEC+ supply management keeps prices from falling below a certain floor, at least for any significant amount of time. At the same time, prices remain high enough to support oil production growth outside of OPEC+, which in turn deters prices from surging too high," Burkhard continued.
"However, the new oil price playing field is, by no means, set in stone and major developments could always alter the boundaries—it has happened before. The same basic fundamentals that drove past shifts are still in play today.
"If prices stay high enough to sustain strong supply gains outside of OPEC+, then pressure rises on OPEC+ to cut more. Most of the time action is taken to support prices, but history shows that sometimes supply restraint and lost market share becomes an increasing burden," Burkhard said.