OPEC sees lower 2020 demand for its oil, points to surplus

OPEC and its allies last week renewed a supply-cutting pact until March 2020. (AFP)
Updated 12 July 2019

OPEC sees lower 2020 demand for its oil, points to surplus

  • The drop in demand for OPEC crude highlights the sustained boost that OPEC’s policy to support prices
  • OPEC and its allies last week renewed a supply-cutting pact until March 2020

LONDON: OPEC yesterday forecast world demand for its crude will decline next year as rivals pump more, pointing to the return of a surplus despite an OPEC-led pact to restrain supplies.
The drop in demand for OPEC crude highlights the sustained boost that OPEC’s policy to support prices by supply cuts is giving to US shale and other rival sources. This potentially gives US President Donald Trump more room to keep up sanctions on OPEC members Iran and Venezuela.
Giving its first 2020 forecasts in a monthly report, the Organization of the Petroleum Exporting Countries said the world would need 29.27 million barrels per day (bpd) of crude from its 14 members next year, down 1.34 million bpd from this year.
“US tight crude production is anticipated to continue to grow as new pipelines will allow more Permian crude to flow to the US Gulf Coast export hub,” OPEC said, using another term for shale oil.
In the report OPEC also forecast that world oil demand would rise at the same pace as this year and that the world economy would expand at this year’s pace, despite slower growth in the US and China.
“The 2020 forecast assumes that no further downside risks materialize, particularly that trade-related issues do not escalate further,” OPEC said of the economic outlook. Brexit poses an additional risk, as does a continuation in the current slowdown in manufacturing activity.”
OPEC, Russia and other producers have since Jan. 1 implemented a deal to cut output by 1.2 million bpd. The alliance, known as OPEC+, last week renewed the pact until March 2020 to avoid a build-up of inventories that could hit prices.
Oil pared earlier gains after the report was released, although prices were still trading above $67 a barrel after three Iranian vessels tried to block a British ship in the Strait of Hormuz oil chokepoint.

HIGHLIGHTS

● Demand for OPEC crude to fall 1.34 million bpd in 2020.

● Cites trade disputes, Brexit as economy risks.

● Oil stocks increase, remaining above five-year average. Points to 2020 supply surplus at current OPEC production.

Despite the supply cut, oil has tumbled from April’s 2019 peak above $75, pressured by concerns over the US-China trade dispute and an economic slowdown.
OPEC also oil inventories in developed economies rose in May, suggesting a trend that could raise concern over a possible oil glut.
Stocks in May exceeded the five-year average — a yardstick OPEC watches closely — by 25 million barrels.
OPEC said its oil output in June fell by 68,000 bpd to 29.83 million bpd as US sanctions on Iran boosted the impact of the supply pact.
According to figures OPEC collects from secondary sources, supply from Iran posted the biggest decline, by 142,000 bpd, as Washington tightened the screws on Iranian exports.
Top exporter Saudi Arabia increased output by 126,000 bpd to 9.81 million bpd in June but continued to voluntarily pump less than the supply pact allows it to in order to bolster the market. Nigeria, seeking a higher OPEC quota, posted the group’s largest boost in output.
With 2020 demand for OPEC crude expected to average 29.27 million bpd, OPEC’s report suggests there will be a 2020 supply surplus of over 500,000 bpd if OPEC keeps pumping at June’s rate and other things remain equal.


London-based high-tech company tackling online extremism

Updated 6 min 26 sec ago

London-based high-tech company tackling online extremism

  • Moonshot CVE employs 40 people working in 15 languages, including English, French and Arabic, on 76 projects in 28 countries, with clients ranging from governments to technology firms

LONDON: Vidhya Ramalingam believes it’s always possible to change, even for people deeply involved in the murky online world of extremism.

Her company Moonshot CVE has the ambitious aim of trying to get anyone tempted by violence back on the straight and narrow.

Over the last four years, the London-based startup has grown quietly but not anonymously, if a recent partnership deal with Facebook is anything to go by.

US national Ramalingam and the firm’s co-founder Ross Frenett previously worked as researchers into extremism and believe radical groups are often one step ahead when it comes to technology.

“There was a lot of recognition that terrorists were using the internet in creative ways, that they were reaching young audiences, that they were able to innovate,” she told AFP in an interview.

“Yet those of us that were trying to counter them simply were moving too slowly and had too many constraints to actually replicate those methods for counter-terrorism purposes.”

That led to the idea of a technology startup able to keep up with and fight against all forms of violent extremism to nationalists and even “incels.” But greater visibility has forced the company to take more security measures because of the sensitive nature of its work — and the potential for violence from the people it tracks.

The address of Moonshot CVE’s London offices is kept secret and most of its staff have no visible online presence.

Just to get into its premises in a nondescript building in the British capital, visitors have to pass through heavy armor-plated doors and a security check.

“We take precautions,” said Ramalingam. “We work on high-risk issues and we try and put as much into the public domain as possible.”

The startup’s name refers to the act of launching a rocket to the moon — and gives an indication of its stellar ambition. The CVE stands for countering violent extremism.

It employs 40 people working in 15 languages, including English, French and Arabic, on 76 projects in 28 countries, with clients ranging from governments to technology firms.

One project is a collaboration with the Canadian government against the far-right. Another works with the UN on online extremist content in Asia.

The company has also had a partnership for several years with Google, using online advertising to target people looking up violent extremism on the net.

The Facebook contract involves Moonshot analizing how effective the social network could be to “deradicalize” users looking up extremist content.