trending Market Intelligence /marketintelligence/en/news-insights/trending/DYVcjigM5-qUEitZn2_hlg2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

In This List

Rebound in oil price creates uncertainty for demand outlook, market direction

Webinar Replay

Deep Dive on Oil & Gas for Financial Institutions

In the Battle for Market Share, Analysts See Downturn Boosting Renewable Energy

Essential Energy Insights - May 14, 2020

Credit Risk: Identifying Early Warning Signals In The Oil And Gas Industry


Rebound in oil price creates uncertainty for demand outlook, market direction

The global oil supply-demand balance is showing signs of tightening but "mixed signals" on the demand side and the question of whether OPEC will sustain production cuts lend an air of uncertainty as to the market's direction.

OPEC production cuts, sanctions on Iran, and falling Venezuelan output have allowed Brent crude oil prices to rebound from around $50 per barrel toward the end of 2018 to just over $70/bbl on April 10, the International Energy Agency said in its latest monthly oil market report, released April 11.

SNL Image

"As far as 2019 is concerned, amongst the analyst community there is an extraordinarily wide divergence of view as to how strong growth will be," the IEA said. "We maintain our forecast of 1.4 [million barrels per day], but accept that there are mixed signals about the health of the global economy, and differing views about the likely level of oil prices."

The IEA pegged year-on-year Chinese oil demand growth for the first two months of 2019 at 410,000 bbl/d, while India saw growth of 300,000 bbl/d and the U.S., supported by its petrochemical sector, saw demand increase by 295,000 bbl/d.

"Although the main sources of demand growth are doing well, there are mixed signals from elsewhere," the IEA said, noting overall demand declined by 300,000 bbl/d in developed countries in the 2018 fourth quarter, "the first such fall for any quarter since the end of 2014, and it is likely to have fallen again in [the first quarter] due to weakness in some European economies, with perhaps more to come if there is a disorderly Brexit."

Noting that high oil prices are "less comfortable for consumers," the IEA said "only time will tell if our current demand forecast proves accurate."

On the supply side, the IEA noted crude oil stocks in developed countries falling to the five-year average was the yardstick by which the effectiveness of OPEC production cuts was measured.

"Data for February shows that stocks are above the average by 16 [million barrels]. However, in terms of days of forward demand cover, which is a more relevant assessment, they are below it, and have been for some time," the IEA said.