BAKU, Azerbaijan, Dec. 12
By Leman Zeynalova - Trend:
Global oil demand increased by 900,000 barrels per day (b/d) year-on-year in the third quarter of 2019, the strongest annual growth in a year, Trend reports citing the International Energy Agency (IEA).
“Nearly three-quarters of the growth occurred in China. Indian demand rose 135,000 b/d, but deliveries from the countries of the Organization of Economic Co-operation and Development (OECD) fell for the fourth straight quarter and are expected to decline 75,000 b/d overall in 2019. For 2019 and 2020 we have left unchanged our global oil demand growth forecasts at 1 million b/d and 1.2 million b/d, respectively,” IEA said in its Oil Market Report.
As for the oil supply, in November, global oil supplies held steady at 101.36 million b/d, down 1.2 million b/d year-on-year, according to the IEA estimates.
At the same time, the agency predicts that the fall in production volume versus today will be about 0.5 mb/d if OPEC+ sticks to its newly-agreed deeper cuts.
“On 6 December, countries participating in the OPEC+ agreement took a step to address this imbalance by deepening their cuts from 1.2 mb/d to 1.7 mb/d. Saudi Arabia once again showed its willingness to shoulder a greater burden by volunteering an additional reduction of 0.4 mb/d to take the total cut to 2.1 mb/d, effective 1 January. The voluntary cut by the Saudis has already been partially delivered but the overall effectiveness of the OPEC+ agreement depends on the willingness of all its parties to fully comply, including those whose compliance so far has been less rigorous. This revised deal excludes from the production ceiling 1.5 mb/d of condensate output by non-OPEC producers. Russia, in particular, now has 0.8 mb/d of supply that can legitimately be increased,” said the report.
If all the countries comply with their new allocations and Saudi Arabia delivers the rest of its voluntary cut of 0.4 mb/d, the fall in production volume versus today will be about 0.5 mb/d, according to the IEA.
“In this report we have reduced our forecast for non-OPEC production growth next year from 2.3 mb/d to 2.1 mb/d to take account of lower output from participants in the OPEC+ deal and a weaker growth outlook for Brazil, Ghana and the United States. Even so, with our demand outlook unchanged, there could still be a surplus of 0.7 mb/d in the market in 1Q20,” said the report.
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