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OPEC still sees drop in demand for its crude in 2019

OPEC continues to see demand decreasing for its crude oil in 2019, the cartel's latest monthly analysis released Dec. 12 shows.

OPEC slightly lowered its 2018 global demand estimate for its crude oil to 32.4 million barrels per day, down 1.1 MMbbl/d from 2017 levels. In 2019, the call on OPEC crude is expected to fall to 31.4 MMbbl/d, easing from a prior monthly estimate of 31.5 MMbbl/d.

In line with demand for its crude, the cartel's first-quarter production totaled 32.4 MMbbl/d, while second-quarter output was 32.2 MMbbl/d, according to secondary sources used to track member output. Third-quarter OPEC production totaled 32.6 MMbbl/d, about 0.1 MMbbl/d higher than the demand for OPEC crude.

While OPEC again dropped its outlook for demand growth for both 2018 and 2019, it hiked its projection for non-OPEC supply growth to 60.03 MMbbl/d in 2018 and 62.19 MMbbl/d in 2019.

The cartel left its projection for world oil demand to average 98.79 MMbbl/d this year and said it still anticipates consumption to top 100 MMbbl/d for the first time ever in 2019, reaching about 100.08 MMbbl/d.

In October, the Organisation for Economic Co-operation and Development commercial oil stocks rose by 7.6 million barrels on the month to a total of 2.88 billion barrels, which is 41 million barrels lower than the same time in 2017 but 22.5 million barrels above the latest five-year average.

On Dec. 7, OPEC members and other major oil producers including Russia agreed to cut oil production by 1.2 MMbbl/d, with members trimming output by 800,000 bbl/d and non-OPEC members reducing production by 400,000 bbl/d. The figure was lower than an OPEC panel's recommendation to decrease output by 1.3 MMbbl/d to balance the market and halt the recent drop in crude oil prices.

Meanwhile, Qatar, which produced 610,000 bbl/d in November, said Dec. 3 that it is withdrawing from OPEC, effective in January 2019.