OPEC revised lower its projection for world oil demand growth for 2019 and 2020 and expects world oil supply growth to continue to slow.
The organization said in its latest monthly report released Oct. 10 that it expects global oil demand in 2019 to grow by 980,000 barrels per day to an average of 99.8 million bbl/d. This is down slightly from OPEC's prior monthly projection due primarily to weaker than expected gasoline and diesel demand in the U.S. and slower than anticipated petrochemical feedstock requirements in Japan and Korea.
OPEC also trimmed its 2020 global oil demand growth outlook. Consumption is expected to increase by 1.08 million bbl/d, similar to its previous outlook, to an average 100.88 million bbl/d in 2020 from 100.92 million bbl/d previously.
Preliminary data indicates global oil supply in September decreased by 1.77 million bbl/d month on month to average 97.32 million bbl/d, compared to the previous month.
According to secondary sources used to track member output, the share of OPEC crude oil in total global production declined by 0.8% to 29.3% in September compared to the previous month.
Amid weak global crude oil prices, OPEC agreed July 1 to keep throttling back output by extending its 1.2 million bbl/d production cut agreement through the first quarter of 2020. In December 2018, OPEC members and other major oil producers including Russia agreed to the oil output cut, with members trimming their output by 800,000 bbl/d and non-OPEC members reducing production by 400,000 bbl/d.
OPEC Secretary General Mohammed Barkindo said Oct. 10 that OPEC, Russia and their allies could make deeper oil output cuts when they next meet Dec. 5-6 in Vienna.
On the sidelines of an industry forum in London, Barkindo said all options are open and that decisions will be made to set a path of heightened sustainability, according to a report from S&P Global Platts. Barkindo said Russia remains fully committed to the cuts, the Platts article said.
Non-OPEC supply, meanwhile, decreased by 450,000 bbl/d month on month to average 68.83 million bbl/d in September, up 1.33 million bbl/d year over year. September's preliminary decline was mainly driven by Canada, Norway, Kazakhstan, Russia and OPEC NGLs, OPEC said.
World oil supply and demand are tied to global economic growth, which OPEC pegged at 3.0% for 2019, unchanged from prior forecasts, but revised down to 3.0% for 2020, compared to 3.1% in the previous month's assessment.
"Slowing growth momentum in the US is likely to carry over into 2020, while ongoing uncertainties in the European Union, including Brexit, remain," OPEC said.
Trade-related issues including recently implemented U.S. tariffs on EU imports and ongoing U.S.-China trade issues are further dampening the growth momentum.
OPEC said, "the ongoing slowdown in global manufacturing activity, continued challenges in Argentina and other emerging and developing economies, and high debt levels in important economies pose additional risks."
S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.
