Although oil consumption saw its strongest growth in a year during the third quarter, the International Energy Agency is again maintaining its global demand growth outlook for this year and 2020.
The Paris-based agency, in its latest "Oil Market Report" released Dec. 12, is keeping its forecasts for global oil demand growth for 2019 and 2020 flat to its prior monthly report at 1 million barrels per day and 1.2 million bbl/d, respectively.
World oil demand increased by 900,000 bbl/d in the third quarter, with almost 75% of the growth coming from China.
At the same time, global oil supply was relatively steady in November at 101.36 million bbl/d, and the IEA said inventories could rise by 700,000 bbl/d in the first quarter of 2020.
OPEC+, a coalition of OPEC members and other major oil producers including Russia, decided Dec. 6 to add another 500,000 bbl/d to the 1.2 million-bbl/d cut agreed to in December 2018 and extended in July. The 1.7 million-bbl/d cut will be instituted in January 2020 and continue through March 31, 2020. OPEC+ members are expected to address a possible extension of the cuts when the group meets again March 5-6, 2020.
"Despite the additional curbs and a reduction in our forecast of 2020 non-OPEC supply growth to 2.1 million [bbl/d], global oil inventories could build by 0.7 million [bbl/d] in 1Q20. In November, global oil supplies held steady at 101.36 million [bbl/d], down 1.2 million [bbl/d year over year]," the IEA said.
Inventories in OPEC countries fell by 32.5 million barrels in October, which is 2.9 million barrels below the five-year average and covered 60.6 days of forward demand, according to the report. Preliminary data for November showed stocks falling in all regions by 23.5 million barrels.