OPEC sees small 2020 oil deficit even before latest supply cut

Saudi Arabia told OPEC that it had cut oil supply levels in November following a production boost in October that came after attacks on its facilities in September. (AFP)
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Updated 12 December 2019

OPEC sees small 2020 oil deficit even before latest supply cut

  • OPEC keeps its 2020 economic and oil demand growth forecasts steady and is more upbeat about the outlook

LONDON: OPEC on Wednesday pointed to a small deficit in the oil market next year due to restraint by Saudi Arabia even before the latest supply pact with other producers takes effect, suggesting a tighter market than previously thought.

In a monthly report, OPEC said demand for its crude will average 29.58 million barrels per day (bpd) next year. OPEC pumped less oil in November than the average 2020 requirement, having in previous months supplied more.

The report retreats further from OPEC’s initial projection of a 2020 supply glut as output from rival producers such as US shale has grown more slowly than expected. This will give a tailwind to efforts by OPEC and partners led by Russia to support the market next year.

OPEC kept its 2020 economic and oil demand growth forecasts steady and was more upbeat about the outlook.

“On the positive side, the global trade slowdown has likely bottomed out, and now the negative trend in industrial production seen in 2019 is expected to reverse in 2020,” the report said.

Oil prices were steady after the report’s release, trading near $64 a barrel, below the level some OPEC officials have said
they favor.

The Organization of the Petroleum Exporting Countries, Russia and other producers, a group known as OPEC+, have since Jan. 1 implemented a deal to cut output by 1.2 million bpd to support the market. At meetings last week, OPEC+ agreed to a further cut of 500,000 bpd from Jan. 1 2020.

The report showed OPEC production falling even before the new deal takes effect.

In November, OPEC output fell by 193,000 bpd to 29.55 million bpd, according to figures the group collects from secondary sources, as Saudi Arabia cut supply.

Saudi Arabia told OPEC it made an even bigger cut in supply of over 400,000 bpd last month. The Kingdom had boosted production in October after attacks on its oil facilities in September briefly more than halved output.

The November production rate suggests there would be a 2020 deficit of 30,000 bpd if OPEC kept pumping the same amount and other factors remained equal, less than the 70,000 bpd surplus implied in November’s report and an excess of over 500,000 bpd seen in July. OPEC and its partners have been limiting supply since 2017, helping to revive prices by clearing a glut that built up in 2014 to 2016. But higher prices have also boosted US shale and other rival supplies.

In the report, OPEC said non-OPEC supply will grow by 2.17 million bpd in 2020, unchanged from the previous forecast but 270,000 less than initially thought in July as shale has not grown as quickly as first thought.

“In 2020, non-OPEC supply is expected to see a continued slowdown in growth on the back of decreased investment and lower drilling activities in US tight oil,” OPEC said, using another term for shale.


Are robots ever going to replace doctors? Experts say ‘no’

Updated 53 min 27 sec ago

Are robots ever going to replace doctors? Experts say ‘no’

  • The panel addressed the role of artificial intelligence (AI) and robotics in the medical field

DUBAI: The growing use of technology in the healthcare industry will continue to expand but should not take over from the primary care provided  by doctors and nurses, a panel of health experts said in a panel discussion at the World Economic Forum on Thursday.

The panel addressed the role of artificial intelligence (AI) and robotics in the medical field, agreeing that all care should remain focused on the needs of the patient, adding that “robots can’t replace doctors.”

But Leif Johansson, chairman of the board at pharmaceutical company, AstraZeneca AB, said the technology would be especially essential to “screening programs and extending access to care.”

“The only way to support primary care centers with low-skilled people, for screening purposes, will be with AI, robotics,” he explained, citing India as an example of a country with a shortage of qualified doctors who can address the needs of a massive population.

While technology presents potential benefits to the industry, Lisa Sanders, Associate Professor at the Yale Medical School, said she was concerned current technology faced a “barrier in data input.”

“How is AI or the robot going to get the data they need from patients?” Sanders, the doctor who was the inspiration behind the hit US TV show “House,” said, questioning how technology “would be able to assess patients when they’re complex and confused.”

Jodi Halpern, a professor of bioethics, shared the same sentiment, and highlighted what she described as three important situations when “a relationship with an actual human doctor makes a difference for effective healthcare.”

One was taking medical history from patients, Halpern said, explaining most patients would only disclose personal information when there’s empathy from doctors.

“If we don't get a good history, we won't get a good treatment," she added.

Another was ensuring patients take medication, and lastly was helping people deal with bad news.

Sanders, a physician herself, said “it’s not the thinking” that doctors need help from technology for, but "other things like dealing with poorly conceived systems of medical records."