The International Energy Agency is again holding its short-term world oil demand growth outlook unchanged for 2018 and 2019.
In its latest "Oil Market Report" released Jan. 18, the Paris-based agency left its 2018 global oil demand growth estimate unchanged on the month at 1.3 million barrels per day, with its 2019 projection firm as well at 1.4 MMbbl/d. While oil consumption is seen ticking higher in parts of Asia that are not in the Organization of Economic Co-operation and Development, as well as in the OECD countries in the Americas, growth in the latter will be slower in 2019 than it was in 2018.
"The impact of higher oil prices in 2018 is fading, which will help offset lower economic growth," the IEA said.
Meantime, global oil supply plunged by 950,000 barrels per day on the month in December 2018 to 100.6 MMbbl/d.
Following a record increase of 2.6 MMbbl/d in 2018, non-OPEC production growth is expected to slow to 1.6 MMbbl/d this year. U.S. supply growth is expected to slow from 2.1 MMbbl/d in 2018 to 1.3 MMbbl/d in 2019 "due to increasing base decline and shale producers moderating their expansion."
OPEC crude oil output dropped by 590,000 bbl/d in December 2018 to 32.39 MMbbl/d, as Saudi Arabia throttled back production from record highs and output from Iran and Libya continued to decline. OPEC production is set to fall further in January, when new output cuts take effect, the IEA said.
OPEC and some non-OPEC oil members agreed in early December 2018 to trim production by 800,000 bbl/d and 400,000 bbl/d, respectively, to address a growing supply overhang and stabilize prices as Brent crude oil swung from $86/bbl in early October 2018 to $58/bbl by November 2018.
Benchmark crude oil futures prices fell to a 16-month low at the end of 2018. Since the beginning of this year, Brent crude oil futures have risen more than 10% in value to a current trading level near $60/bbl.