OPEC CUTS 2020 OIL DEMAND FORECAST

OPEC cut its forecast for growth in world oil demand in 2020 due to an economic slowdown, an outlook the group said highlighted the need for ongoing efforts to prevent a new glut of crude. In a monthly report, Opec said oil demand worldwide would expand by 1.08 million barrels per day (bpd), 60 000 bpd less than previously estimated, and indicated the market would be in surplus. The weaker outlook amid a US-China trade war and Brexit could press the case for Opec and its allies to maintain or adjust their policy of cutting output. Iraq said ministers would discuss today whether deeper cuts were needed. Opec, in the report, lowered its forecast for world economic growth in 2020 to 3.1 percent from 3.2 percent and said next year’s increase in oil demand would be outpaced by “strong growth” in supply from rival producers such as the US. “This highlights the shared responsibility of all producing countries to support oil market stability to avoid unwanted volatility and a potential relapse into market imbalance,” the report said. Opec, Russia and other producers have since January 1 implemented a deal to cut output by 1.2 million bpd. The alliance, known as Opec+, in July renewed the pact until March 2020 and a committee reviewing the pact meets today. Oil prices pared an earlier gain after the report was released to sit just below $63 (R926) a barrel. Oil has tumbled from April’s peak above $75.