- Oil is trading higher after continued Red Sea hostilities
- The API estimates that US crude inventories fell by 5.2 MMBbls last week, ahead of the official EIA data release today
- The EIA released its Short-Term Energy Outlook yesterday
- The agency forecasts that US production will continue to climb, reaching 13.2 MMBbl/d in 2024 and 13.4 MMBbl/d in 2025
- The EIA sees the OPEC+ cuts leading to global inventory withdrawals of 800 MBbl/d on average in Q1 2024, followed by a more balanced period from Q2 2024 through Q1 2025
- Houthis launch largest Red Sea attack to date (BBG)
- The Houthi rebels based in Yemen launched their largest attack since hostilities began earlier today, forcing a response from US and UK naval forces
- American and British forces shot down 18 drones and three anti-ship missiles as the Iranian-backed group continues to escalate attacks on the vital shipping lane
- Fears of further escalation in the region have led shipping firms to use alternative routes, which has led to a higher cost of shipping
- Vitol’s Head of Asia sees a balanced oil market in 2024 (BBG)
- While demand is expected to continue to grow strongly, it will mostly be matched by rising supply from the US, Brazil, and Guyana, said Mike Muller of trading firm Vitol
- As a result of this balanced market, OPEC may be required to continue their production cuts to keep oil prices close to $80/Bbl
- Muller added that “the big focus is on spare capacity and how OPEC or Russia keep their various partners in line”
