Global Oil Market Faces Major Deficit as Production Cuts Persist

In the closing months of 2023, the global oil market faced a potential gap large enough to be the widest in 16 years, a projection reported by an agency drawing on the latest OPEC analysis. The assessment points to a tight market where supply might fall short by roughly 3.3 million barrels per day, driven in part by Saudi Arabia’s ongoing reduction of output by about 1 million barrels each day. This constraint on supply echoes through the market, with observers noting that the deficit has begun to reshape price dynamics across key trading hubs. According to Bloomberg calculations, the world’s daily oil shortfall surged dramatically, expanding by about 18 times over the previous six months to an estimated 1.8 million barrels per day, a shift that contributed to Brent crude trading above the $90 per barrel level in European markets. The move added further pressure on the European energy complex and heightened concerns about global supply resilience in the near term. (Bloomberg)