The latest from the eternal game to shape the global oil market

It was an interesting day in oil markets yesterday as state oil giant Aramco continued its push into US oil trading, OPEC looked to looked to put its spin on recent remarks by Aramco and Energy Minister Prince Abdulaziz bin Salman on Aramco’s decision to scale back investment in hydrocarbons, and the IAE once more tries to shape oil market expectations for the year.

#1- Aramco capping its plans for oil capacity expansion ≠ drop in oil demand: Aramco’s decision to put on hold plans for oil capacity expansion shouldn’t be seen as a sign that demand for oil is falling off the face of the earth, OPEC Secretary General Haitham Al Ghais told Reuters yesterday. “First of all I want to be clear that I cannot comment on a Saudi decision … but this is in no way to be misconstrued as a view that demand is falling,” he said on the sidelines of the World Governments Summit in Dubai.

#2- A “comfortable” year for oil markets? Global oil markets are bound for a “comfortable” year as output meets demand and keeps prices moderate, International Energy Agency (IEA)’s Executive Fatih Birol told Bloomberg in an interview yesterday. Birol expects global oil consumption to rise by 1.2 to 1.3 mn barrels a day this year, a pace that he described as “significantly weaker” than last year amid a slower economic growth in China and others.

What the IEA chief is saying: “This growth is more than enough to meet the global oil demand,” he said. “So in the absence of major geopolitical turmoil or major extreme weather events, we would expect a rather comfortable oil market and moderate oil price evolution throughout 2024.”

#3- State oil giant Aramco has started trading a grade of US crude that helps set the global Brent benchmark, Reuters reported yesterday, citing S&P Global Commodity Insights — the oil-index publisher overseeing the process. The world’s largest oil company has been expanding its trading business in recent years, marking its first WTI trades in the Platts window after it sold a shipment of USD WTI Midland to Total yesterday and another US crude cargo last week.