OPEC Makes the Case for Oil Supply Restraints to Ease

The latest market forecasts from the world’s oil producer and consumer groups might as well be describing two different planets. Which one OPEC+ ministers believe they inhabit will be crucial for their production decision in June.

The International Energy Agency is relatively downbeat on the outlook for demand. On Friday, it trimmed its 2024 forecast by 100,000 barrels a day and cut first-quarter consumption estimates by three times that amount.

In contrast, analysts at the Organization of Petroleum Exporting Countries see “robust” oil needs for the summer months.

The IEA’s forecast suggests OPEC+ needs to keep a tight grip on supply, especially as output grows among producers outside the alliance’s control.

While the consumer group foresees short-lived tightness during the summer — with OPEC crude production falling short of demand by as much as 400,000 barrels a day — the market will be back in balance by the final quarter, it says.

The producers’ analysts have a very different view. Their outlook points to a much clearer need for OPEC+ to relax supply restrictions.