OPEC cuts forecast for global oil demand growth in 2019

OPEC cut its forecast for growth in non-OPEC oil supply in 2019 by 30,000 bpd to 2.12 million bpd. (AFP)
Updated 11 October 2018
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OPEC cuts forecast for global oil demand growth in 2019

  • OPEC cut its forecast for growth in non-OPEC oil supply in 2019 by 30,000 bpd to 2.12 million bpd

LONDON: OPEC cut its forecast of global demand growth for oil next year for a third straight month on Thursday, citing headwinds facing the broader economy, and key consuming countries in particular, from trade disputes and volatile emerging markets.
In its monthly report, the Organization of the Petroleum Exporting Countries said world oil demand would increase by 1.36 million barrels per day (bpd) next year, marking a decline of 50,000 bpd from its previous estimate.
The group also cut the estimate for demand in 2019 for its own crude by another 300,000 bpd from last month to 31.8 million bpd, which in turn marks a decline of 900,000 bpd from the projection for 2018.
OPEC said its own production rose by 132,000 bpd in September to 32.76 million bpd, the highest according to the monthly report since August 2017.
Saudi Arabia and Libya increased output last month by 108,000 bpd and 103,000 bpd respectively, more than offsetting the 150,000-bpd decline from Iran to 3.447 million bpd, as reported by secondary sources.
OPEC said Iran told the group its oil output had fallen by just 51,000 bpd to 3.775 million bpd.
The group, led by Saudi Arabia, has pledged to increase output to compensate for the loss of any Iranian supply to US sanctions that come into force next month.
OPEC cut its forecast for growth in non-OPEC oil supply in 2019 by 30,000 bpd to 2.12 million bpd.


Oil edges up on looming Iran sanctions, but US-China trade war caps gains

Updated 8 min 49 sec ago
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Oil edges up on looming Iran sanctions, but US-China trade war caps gains

  • Other producers may struggle to fully make up for the expected fall in Iranian supply
  • But overall global oil supply was currently enough to meet demand

SINGAPORE: Oil prices edged up on Monday, as markets were expected to tighten once US sanctions against Iran’s crude exports are implemented next month.
Front-month Brent crude oil futures were trading at $79.88 a barrel at 0248 GMT, 10 cents above their last close.
US West Texas Intermediate (WTI) crude futures were at $69.31 a barrel, 19 cents above their last settlement.
Also in the United States, Intercontinental Exchange said its new Permian West Texas Intermediate crude futures contract deliverable in Houston, Texas, will begin trading on Monday.
The main price driver in Asia on Monday was the looming start of US sanctions against Iran’s oil exports, which will start on November 4.
While the Organization of the Petroleum Exporting Countries (OPEC) agreed in June to boost supply to make up for expected Iran disruptions, an internal document reviewed by Reuters suggested that OPEC is struggling to add barrels to the market as an increase in Saudi Arabian supply was offset by declines in Iran, Venezuela and Angola.
Fatih Birol, executive director of the International Energy Agency, said on Monday that other producers may struggle to fully make up for the expected fall in Iranian supply, and that coupled with strong demand, oil prices could rise further.
Traders said major oil consumers were stockpiling in anticipation of more disruptions.
“In China, higher seasonal demand and suspected stockpiling are occurring, while similarly the US and the OECD continue building stockpiles ahead of potential supply disruptions this winter,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore.
Despite this, Innes said overall global oil supply was currently enough to meet demand.
There were also some signs of rising output, especially in North America.
US drillers added four oil rigs in the week to Oct. 19, bringing the total count to 873, Baker Hughes energy services firm said on Friday, raising the rig count to the highest level since March 2015.
The US rig count is an early indicator of future output. With activity rising again after months of stagnation, US crude production is also expected to continue to rise.
Looking further out, concern that the trade dispute between the United States and China would crimp economic growth may weigh on the outlook for oil prices.
“The full impact of the US-China trade war will hit markets in 2019 and could act as a considerable drag on oil demand next year, raising the possibility of the market returning to surplus,” said Emirates NBD bank in a note.
Shipping brokerage Eastport said on Monday that “Chinese manufacturing is beginning to slow” and that “Trump’s proposal of slapping ... tariffs on additional ... Chinese goods from 1 January would be a further drag on trade.”