Global oil demand forecasts revised up
Baku, Azerbaijan, Feb.5
By Leman Zeynalova – Trend:
Global oil demand growth forecasts have been raised from 1.73 million barrels per day to 1.79 million barrels per day for the first half of 2018, the US JP Morgan Bank said in its report.
“We now expect 1H18 demand growth to average 1.79 million barrels per day as compared to 1.73 million barrels per day based on previous estimates and our 2H18 growth is now estimated at 1.67 million barrels per day, as compared to 1.74 million barrels per day published in our annual review,” said the report obtained by Trend.
JP Morgan experts believe that 2018 will be a year of two halves.
“We believe the first half will be driven strongly by demand and the second half by supply response to the oil price. Fundamentals will be key to oil prices in 2018 as markets are close to being balanced. However, macro factors, such as the US dollar or geopolitics, could provide a boost to volatility more so than in 2017,” said the report.
Given the tighter balances, JP Morgan expects oil markets to be in deficit in 2018.
“We have brought forward the deficit to 1H18 and now expect oil inventories in first half of 2018 to draw by 0.5 million barrels per day on average and further 0.3 million barrels per day in the second half of this year,” the analysts believe.
Looking beyond 2018, JP Morgan experts think global demand for oil products will stabilize and should come below our 2018 estimates as demand growth slows in OECD (Organization for Economic Co-operation and Development).
“Breaking 2018 demand growth into its constituent parts, middle distillates are the key driver of the 1.76 million barrels per day year-on-year growth,” said the report.
The pick-up in European demand has been one of the most striking shifts underway in the oil market over the last 6-12 months, according to the analysts.
“Europe traditionally acts as a drag on demand growth elsewhere in the world and yet 2018 is on track to deliver the third consecutive year of positive demand growth,” said JP Morgan.
Follow the author on Twitter: @Lyaman_Zeyn