The Strategist

OPEC lowers forecast for growth in oil demand for 2018 and 2019

09/12/2018 - 16:06

OPEC downgraded forecast for the growth of world oil demand in 2018 by 20 thousand barrels per day, up to 1.62 million barrels per day (bpd). This is stated in the OPEC report. The organization's forecast for world oil demand in 2019 was also reduced by 20 thousand bpd, up to 1.41 million bpd.

World demand for oil in 2019 is projected at 100.23 million bpd, which is 30,000 bpd below the previous forecast, and the demand level in 2018 was reduced by 10,000 bpd, up to 98.82 million bpd.

OPEC also lowered the forecast for the supply of oil in 2018 from non-OPEC countries by 60,000 barrels to 59.56 million bpd. Thus, the increase in supply will be 2.02 million bpd, the OPEC September report says.

The demand forecast was revised due to the fact that OPEC expects a smaller increase in demand for oil in Latin America and the Middle East.

According to the organization’s estimates, the growth in supply of oil from non-OPEC countries in 2019 will accelerate to 2.15 million bpd. In absolute terms, the volume of oil supply by non-OPEC countries in 2019, the organization's experts forecast at 61.71 million barrels.

The forecast for the supply of oil from non-OPEC countries for 2019 was revised due to a decrease in production in Mexico and Norway, while the main growth in supply will be provided by the USA, Brazil, Canada.

According to the report, OPEC countries in August increased oil production by 278 thousand bpd, up to 32.56 million barrels due to countries such as Libya, Iraq and Nigeria.

Thus, in August, the countries of the cartel exceeded the production ceiling of 32.5 million barrels, set at the end of 2016 under the Vienna Agreement. Since July, OPEC + countries have eased their restrictions and are increasing their production.

The main growth in oil production was in Libya, which increased the figure by 256 thousand barrels, up to 0.926 million bpd. Iraq, despite the unrest in Basra, increased production by 90,000 barrels to 4.65 million. Nigeria added 74,000 to 1.72 million barrels in August, while Saudi Arabia totaled 38,000 to 10,000 , 4 million barrels. Iran, which expects the entry of US sanctions limiting its oil exports, has cut production by 150,000 to 3.58 million barrels, the report says.

Libya and Nigeria did not cut production under the agreement on the limitation of production, as they were exempt from such obligations. Thus, without taking into account their growth, OPEC even reduced production in August.

Iran, which expects the entry of US sanctions limiting its oil exports, has cut production by 150,000 to 3.58 million barrels, the report says.

In August, production continued to fall in Venezuela - minus 36 thousand barrels - to 1.2 million, and in Angola - minus 8 thousand barrels - to 1.4 million barrels.


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