Oil prices continued to edge higher yesterday and this trend is likely to continue in early morning trading today after API numbers overnight showed that US crude oil inventories fell by 2.4m barrels last week while crude stocks in Cushing declined by 1.9m barrels. On the product side, gasoline inventories fell by 2.5m barrels and distillate stocks increased by 1m barrels. Overall, the numbers were constructive.
OPEC released its latest monthly oil market report yesterday and the group maintained its bullish demand growth forecasts for both this year and next. OPEC expects global oil demand to grow by 2.25m b/d in 2024 and by a further 1.85m b/d in 2025. These numbers are quite a bit stronger than the EIA and IEA are forecasting. OPEC also left its non-OPEC+ supply growth forecasts unchanged for 2024 and 2025 at 1.23m b/d and 1.1m b/d respectively. The report also showed that OPEC production increased by 29k b/d MoM to 26.63m b/d in May, while total OPEC+ output fell by 123k b/d MoM to 40.92m b/d. This decline was driven by Russia and Kazakhstan, where output fell by 119k b/d and 62k b/d respectively. The IEA will release its latest monthly oil market report today.
In its latest Short-Term Energy Outlook, the EIA revised higher its US crude oil supply growth estimates for 2024. US oil supply is forecast to grow by 310k b/d YoY to 13.24m b/d this year, up from a previous forecast of 13.2m b/d. While for 2025, output growth forecasts were lowered from 520k b/d to 470k b/d.
Supply concerns have resurfaced in global gas markets after the Wheatstone LNG facility in Australia suspended operations to complete repairs to its offshore platform. The Wheatstone LNG plant consists of two trains with a combined capacity of 8.9 mtpa. It is still unclear how long the outage will last. The news saw gas prices swinging through the trading day yesterday, however, TTF settled only marginally higher. A prolonged outage will provide some support to prices, particularly with the stronger demand we are seeing from Asia at the moment. LSEG data shows that Asian LNG imports grew 10% YoY in the first five months of the year.
