Growth Outside OPEC+ Robust

Key takeaways:

– One would expect that oil prices to be at higher levels than what they have exhibited recently, especially given the surge in demand from the summer season and the ongoing geopolitical developments happening around the world namely in Gaza and Ukraine. 

– However, current prices reflect demand concerns coupled with strong supplies coming from outside OPEC+ and led by the US, in addition to Guyana, Canada and Brazil. 

– OPEC continues to be the most bullish in terms of global demand growth for 2024 compared to other institutions such as the International Energy Agency (IEA). If it remains loyal to its forecasts, we are unlikely to see changes to its decision of gradually introducing barrels back to the market. 

– Over the years, many analysts have been pessimistic on the outlook for US shale, yet each time shale has surpassed expectations and has grown further.

While a Republican President, such as Trump, might boost sentiment toward the oil industry, uncertainties regarding the US’s relationships with Russia, Iran, and China among others need to be incorporated on potential impact on the global economy, trade and oil markets.

– Harris’s policies vis-a-vis the energy sector are yet to be fully disclosed. However, based on the Biden-Harris Administration’s previous actions—such as banning new oil and gas leases on US federal land and freezing new licenses for LNG exporters—it can be inferred that Harris’s stance is generally not that sympathetic to oil and gas.

– At the end, in a free market and competitive industry, the market drives investment decisions.