Macro oils short-term outlook: May 2024 Report

Commodity Market Report 10 May 2024

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Report summary

In early May, Brent fell toward $83/bbl after the political risk premium weakened with encouraging signs that a ceasefire in the Israel-Hamas war might be reached. In addition, the US Federal Reserve announcement after its 30 April - 1 May meeting that it is keeping interest rates unchanged and holding them at current high levels added downward pressure on prices. We expect prices to recover in May as the market fundamentals still support stronger prices through Q3 2024. Highlights of this monthly update include: • Implications of a potential alternative outcome to the June OPEC+ meeting • Ongoing recovery in global manufacturing supports a distillate rebound this year • Iraq production revised up as output from Kurdistan exceeds expectations • Russia production remains above OPEC+ voluntary target in April

2 June OPEC+ meeting
Global Supply: minor changes to the outlook as market ponders early June OPEC+ outcome
Non-OPEC supply: downgrades across North America, Europe and Africa drive changes this month
Lower 48 annual oil production growth forecast to slow to 250,000 b/d in 2024
Private operators in the Rockies have added 300,000 b/d of new supply since January 2021
OPEC: OPEC+ production cuts continue in Q2
Global demand: Ongoing recovery in global manufacturing supports a distillate rebound this year
Liquids demand by key markets
Global outlook for 2025
Risks to the outlook