OPEC further lowers oil demand growth forecasts
OPEC further lowered its oil demand growth estimates for this year and next amid weaker forecasts for the global economy, adding uncertainty to producer efforts to support the market.
In its monthly oil market report OPEC’s research arm said world oil demand this year will rise by just over 1.54m barrels a day, 80,000 barrels per day (b/d) less than last month’s estimate.
In 2019 oil demand will grow by 1.36m b/d, 50,000 b/d less than last month’s estimate, the group said on Thursday, reflecting new economic data for Turkey, Brazil and Argentina.
Robust oil demand growth helped OPEC and its allies outside of the cartel such as Russia shrink a supply glut that had driven prices lower in recent years.
But there are fears that global economic uncertainty could see renewed growth in stockpiles in the coming months despite producer efforts to curb supplies and keep prices in check.
“Global economic growth remains solid, but is facing potential headwinds,” OPEC said in the report. “While growth in the major OECD economies remains well supported, decelerating trends have become visible in some emerging markets and developing countries.”
Mohammed Barkindo, secretary-general of OPEC, told reporters on Thursday, anxieties about the demand outlook meant you could see a “possible rebuilding of stocks”.
Impending U.S. sanctions against Iran’s energy sector is another wild card holding over the oil market. There are mounting questions about how severe the impact will be on Tehran’s production and exports.
Iran’s production, according to estimates by analysts and consultants submitted to OPEC, stood at around 3.4m b/d, which is down from roughly 3.8m b/d in the first quarter.
Saudi Arabia, which has said it would be able to step in to compensate for any losses from Iran, plans to raise output to a record 10.7m b/d this month.
In September Saudi production, according to secondary sources, reached 10.5m b/d - up from close to 10m b/d earlier this year.
In September, OPEC crude oil production increased by
132,000 b/d to average 32.76m b/d
The group marginally revised higher its estimates for supply growth from non-Opec countries led by the U.S., to 2.2m b/d for 2018. In 2019 it will stand around
Amid weaker demand growth and marginally higher supply additions from outside of the cartel, OPEC revised lower its forecasts for how much crude will be required from the group. Demand for OPEC crude is now estimated at 32.7m b/d this year and 31.8m b/d in 2019.