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IEA sees surplus oil supply in 2024 even if OPEC+ extends current cuts

Published 21/11/2023, 10:46 pm
© Reuters. FILE PHOTO: An oil pump of IPC Petroleum France is seen during sunset outside Soudron, near Reims, France, February 6, 2023.  REUTERS/Pascal Rossignol/File Photo
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By Nerijus Adomaitis

OSLO (Reuters) -The global oil market will see a slight surplus of supply in 2024 even if the OPEC+ nations extend their cuts into next year, the head of the International Energy Agency's (IEA) oil markets and industry division told Reuters on Tuesday.

At the moment, however, the oil market is in a deficit and stocks are declining "at a fast rate", Toril Bosoni said on the sidelines of a conference in Oslo.

"Global oil stocks are at low levels, which means that you risk increased volatility if there are surprises on either the demand side or the supply side," she added.

OPEC+ is set to consider whether to make additional oil supply cuts when the group meets later this month, three OPEC+ sources have told Reuters after prices dropped by some 16% since late September.

Oil has slid to around $82 a barrel for Brent crude from a 2023 high in September of near $98. Concern about demand and a possible surplus next year has pressured prices, despite support from the OPEC+ cuts and conflict in the Middle East.

Saudi Arabia, Russia and other members of OPEC+ have already pledged total oil output cuts of 5.16 million barrels per day (bpd), or about 5% of daily global demand, in a series of steps that started in late 2022.

The cuts include 3.66 million bpd by OPEC+ and additional voluntary cuts by Saudi Arabia and Russia.

© Reuters. FILE PHOTO: An oil pump of IPC Petroleum France is seen during sunset outside Soudron, near Reims, France, February 6, 2023.  REUTERS/Pascal Rossignol/File Photo

At its last policy meeting in June, OPEC+ agreed on a broad deal to limit supply into 2024 and Saudi Arabia pledged a voluntary production cut for July of 1 million bpd that it has since extended to last until the end of 2023.

Brent crude futures fell 34 cents, or 0.4%, to $81.98 a barrel by 1134 GMT.

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