Published: Thu, September 12, 2019
Economy | By

OPEC Cuts 2020 Oil Demand Forecast

OPEC Cuts 2020 Oil Demand Forecast

OPEC downgraded its estimate of world economic growth in 2020 from 3.2 to 3.1 percent, which led to lower expectation for global oil demand.

Separately, OPEC said in a monthly report that oil demand worldwide would expand by 1.08 million barrels per day in 2020, 60,000 bpd less than previously estimated, and indicated the market would be in surplus.

Oil prices erased earlier gains on Thursday, as the International Energy Agency (IEA) pointed to the "daunting" task of balancing the market next year amid surging US supply and no movement towards deeper output cuts by OPEC and its allies.

Reuters reports that producers are still over-complying with the supply-cutting deal, but this puts OPEC output further above the 2020 demand forecast.

Analysts said fall in crude oil futures is mostly in tune with a weak trend in domestic markets where it slipped on profit-booking by speculators.

"OECD oil inventories fell in July and stood 36 million barrels above latest 5-year average - the level originally targeted by supply cut deal".

OPEC and its partners have been limiting supply since 2017, helping to clear a glut that built up in 2014-2016 when producers pumped at will, and revive prices.

The policy has given a sustained boost to U.S. shale and other rival supply, and the report suggests the world will need less OPEC crude next year.

The call signals that the two countries want over-producing countries such as Nigeria and Iraq to curb output to help boost oil prices.

Saudi Arabia's October production would be 9.890 million barrels per day, Prince Abdulaziz bin Salman said after a meeting of ministers from the Organisation of the Petroleum Exporting Countries and its allies led by Russian Federation.

Venezuela is also under US oil export sanctions, but OPEC members have to abide by their collective output cuts.

Over the past four weeks, crude oil imports averaged about 6.69 million b/d, down by 883,000 b/d year-on-year; crude oil exports averaged about 3.05 million b/d, up by about 1.48 million b/d year-on-year.

Meanwhile, Saudi Aramco has picked a slew of banks to work on its planned initial public offering following intense lobbying by some of the world's top dealmakers, people with knowledge of the matter said.

Like this: