World oil production rose by more than 19%, or around 320,000 barrels per day (bpd), to nearly 102 million bpd in October, with US and Brazilian production outperforming forecasts, according to the International Energy Agency's (IEA) latest report on Tuesday.
The production level in October was also 140,000 bpd above a year ago and is expected to continue its upward trajectory in 2024 to reach an unprecedented 103.4 million bpd.
OPEC output stood at 33.79 million bpd in October, down by about 100,000 bpd from September as increases from Angola, Iraq and Russia offset slight declines elsewhere.
Non-OPEC oil production, however, increased month over month by 320,000 bpd to 68.23 million bpd in October.
According to the report, the war between Israel and Hamas that began on Oct. 7 has not had any material impact on oil supply flows.
Iran’s call for an oil embargo on Israel has failed to gain traction, and Saudi Arabia’s Minister of Investment Khalid al Falih ruled out using economic tools such as oil prices to achieve a cease-fire in early November.
With the OPEC+ producer bloc due to convene for a full ministerial conference on Nov. 26 in Vienna to review policy for the year ahead, the report said it is unclear when and how Riyadh and Moscow will roll back their voluntary reductions that are in addition to a 2 million bpd cut to the OPEC+ output ceiling.
“For the remainder of this year, the Kingdom’s self-imposed supply cuts look set to keep the oil market in a significant deficit that could see the OPEC+ group pump 900,000 bpd below the call on its crude. If Saudi Arabia were to stick with its cut through the first quarter of 2024, our balances suggest the market could still be in a slight surplus,” the report said.
- Demand growth to slow in 2024
Global oil demand is set to climb by 2.4 million bpd to 102 million bpd this year, 110,000 bpd more than projected in last month’s report.
China leads the growth with a contribution of around 1.8 million bpd.
Global oil demand growth is expected to decelerate sharply to 930,000 bpd in 2024, to reach 102.9 million bpd.
The report, which reflected the dovish shift in central bank messaging and stoked expectations of a soft landing, noted that the impact would be minimal. Additionally, it said that investors have factored in the conclusion of monetary tightening, with interest rate reductions predicted to resume by the middle of 2024.
By Sibel Morrow