OPEC Faces Declining Demand And Shrinking Market Share In Early 2024

• The Organization of the Petroleum Exporting Countries (OPEC) is facing weakening demand for its crude in the first half of 2024, just as its global market share declines to the lowest since the Covid-19 pandemic on the back of output cuts and member Angola's exit, according to Reuters calculations and data from forecasters.
• The trend means the group would struggle to ease production cuts unless global oil demand accelerates or OPEC is prepared to accept lower oil prices.
• Angola said it is leaving OPEC from January 2024, following exits by Ecuador in 2020, Qatar in 2019 and Indonesia in 2016. Angola's departure will leave the group with 12 members and take its production below 27 million barrels per day (bpd) - less than 27% of the total global supply of 102 million bpd.
• The last time OPEC's market share fell to 27% was during the 2020 pandemic, when global demand dropped by 15-20%. Since then, global demand has recovered to record levels, meaning OPEC has lost market share to rivals. As of November 2023, OPEC's crude oil output accounted for 27.4% of the total market, down from 32-33% in 2017-2018, according to figures from the group's monthly reports.
• The Energy Information Administration sees demand for OPEC crude falling in the second quarter from the first, based on a Reuters calculation. The Energy Information Administration sees demand for OPEC crude holding steady, while OPEC also sees it falling, albeit from a higher level than the other two forecasters.

(Source: Reuters)