OPEC fur­ther low­ers oil de­mand growth fore­casts

Tehran Times - - ENERGY -

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

2.1m b/d.

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.

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