Demand for OPEC crude oil will continue to fall in 2019, according to data from the cartel's latest Monthly Oil Market Report released Jan. 17.
Demand for OPEC crude in 2019 is forecast at 30.8 million barrels per day, around 0.9 MMbbl/d lower than the 2018 level. When compared to the same quarters in 2018, demand in the first and second quarters is forecast to fall by 1.1 MMbbl/d and 0.6 MMbbl/d, respectively, while demand in the third and fourth quarters is expected to fall by 0.6 MMbbl/d and 1.4 MMbbl/d, respectively.
In 2018, OPEC crude production averaged 32.0 MMbbl/d in the third quarter, around 0.1 MMbbl/d higher than the demand for OPEC crude. In the fourth quarter, OPEC crude production stood at 32.1 MMbbl/d, around 0.4 MMbbl/d higher than the demand for OPEC crude, according to secondary sources monitoring member production.
In line with global oil demand outlooks for 2019, OPEC members and other major oil producers including Russia, in December 2018, pledged to cut production beginning in January by 1.2 MMbbl/d, amid outlooks for slower world oil demand growth. Members announced plans to trim output by 800,000 bbl/d and non-OPEC members are called to reduce 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 a drop in crude oil prices.
The year-over-year growth forecast for non-OPEC supply in 2019 was revised lower with non-OPEC supply seen growing by 2.10 MMbbl/d in 2019, a reduction of 0.06 MMbbl/d from the prior outlook.
OPEC held its forecast for 2019 world oil demand growth unchanged from the previous month. The cartel sees world oil demand growing by 1.29 MMbbl/d in 2019 to reach 100.8 MMbbl/d, which would be slightly slower than 2018 world oil demand growth of 1.50 MMbbl/d.
The Organization for Economic Cooperation and Development region is expected to add 0.25 MMbbl/d demand from 2018 levels to reach a total of 48.12 MMbbl/d, with demand from the U.S. increasing 1.15% to 20.96 MMbbl/d amid steady NGL and middle distillate requirements. In the non-OECD region, oil demand is projected to rise by 1.04 MMbbl/d on the year with lower Chinese oil demand growth countered by healthy gains in oil requirements in Latin America and the Middle East.