Oil production in non-OPEC+ countries, including the United States, is expected to increase by 2.5 million barrels per day in 2024. This exceeds the projected increase in global demand by 1.1 million barrels per day. Bloomberg writes about this.
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In response to this, OPEC promises to reduce production further by 0.4 million barrels per day. However, traders are skeptical that these measures will be enough to completely eliminate the surplus.
Already, oil prices have fallen to their lowest levels in years. If the trend toward an oil glut continues, prices could fall even lower.
A decline in oil prices will have both positive and negative consequences. On the one hand, this could lead to lower energy costs for consumers and businesses. But this could harm oil producers, who could lose profits.
The final picture will depend on how quickly OPEC+ can clear out the oil surplus.