The average price of ICE Brent crude oil during the third quarter of 2024 (from July 1 to September 9) was $80.4 per barrel, a decrease from $84.9 per barrel in the second quarter of 2024. This drop is largely due to OPEC+’s planned production increase by 180,000 barrels per day (KBD) from October to December 2024, and by 213 KBD per month from January to September 2025. Previously, OPEC+ had voluntarily cut production by 2.2 million barrels per day. Additionally, demand has decreased as the US driving season came to an end and the political situation in Libya stabilized. However, on September 5, 2024, eight OPEC+ nations announced a two-month postponement for the planned production increase.
OPEC has revised its forecast for global oil demand growth for 2024 and 2025 downward for the second consecutive time, now expecting demand to increase by 2.04 million barrels per day in 2024, reaching a total of 104.25 million barrels per day. This marks a reduction of 0.07 million barrels per day from previous expectations. For 2025, the projected growth is 1.73 million barrels per day, increasing total demand to 105.98 million barrels per day, down by 0.13 million barrels per day from earlier forecasts. This downward revision is linked to the ongoing real estate crisis in China, which has hindered the country’s recovery in oil demand.
The US economy is also showing signs of slowing down. The US Department of Labor reported an increase of only 142,000 nonfarm payroll positions in August 2024, falling short of analysts’ expectations of 160,000.
Additionally, there are indications of potential progress towards a ceasefire between Israel and Hamas. On September 7, 2024, Israel saw its largest protests ever, with approximately 700,000 to 800,000 demonstrators in major cities like Tel Aviv, Haifa, and Karkur urging Prime Minister Benjamin Netanyahu to secure a ceasefire deal. Israel’s population is approximately 9.8 million.
According to the international market analysis team at PTT Public Company Limited’s International Trading Business Unit, ICE Brent crude prices for the fourth quarter of 2024 are expected to fluctuate between $70 and $85 per barrel. OPEC+ plans to ramp up crude oil production from December 2024 by 189 KBD per month, and in January 2025 by 207 KBD per month. OPEC+ is set to hold its Joint Ministerial Monitoring Committee (JMMC) meeting on October 2, 2024. Meanwhile, the US Federal Reserve is scheduled to conduct its Federal Open Market Committee (FOMC) meeting on September 17-18, 2024, with most analysts anticipating a 0.25% cut in the policy interest rate, which would lower it to a range of 5%-5.25% and help boost the global economy and oil demand.
Attention is also warranted on the hurricane season in the US, which runs from June to November 2024. In August, the National Oceanic and Atmospheric Administration (NOAA) forecasted between 17 and 24 storms with winds of 39 mph or higher during the season, with 8 to 13 possibly developing into hurricanes (winds of 74 mph or higher) and 4 to 7 potentially becoming major hurricanes (winds of 111 mph or higher). Currently, the Gulf of Mexico produces 1.8 million barrels per day (MMBD) of crude oil, accounting for 14% of US oil production, and 21.68 million metric tons per annum (MMTA) of natural gas, representing 5% of US natural gas production.
