• 4 minutes Trump will meet with executives in the energy industry to discuss the impact of COVID-19
  • 8 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 11 minutes Why Trump Is Right to Re-Open the Economy
  • 13 minutes Its going to be an oil bloodbath
  • 21 mins Ten days ago Trump sent New York Hydroxychloroquine. Being administered to infected. Covid deaths dropped last few days. Fewer on ventilators. Hydroxychloroquine "Cause and Effect" ?
  • 2 hours US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again
  • 7 hours Mr
  • 16 hours While China was covering up Covid-19 it went on an international buying spree for ventilators and masks. From Jan 7th until the end of February China bought 2.2 Billion masks !
  • 4 hours Free market or Freeloading off the work of others?
  • 4 hours China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 6 hours Marine based energy generation
  • 18 hours What If ‘We’d Adopted A More Conventional Response To This Epidemic?’
  • 19 hours How to Create a Pandemic
  • 20 hours Apple to Bypass Internet and Beam Directly to Phones
  • 11 hours Which producers will shut in first?
  • 18 hours Real Death Toll In CCP Virus May Be 12X Official Toll
Alt Text

Could Oil Really Fall To $0?

More bad news for the…

Alt Text

Texas Oil Drillers Prepare To Halt Production

Texas oil companies may soon…

ZeroHedge

ZeroHedge

The leading economics blog online covering financial issues, geopolitics and trading.

More Info

Premium Content

Why OPEC Is Concerned About Global Demand Growth

Amid fears of global oil supply disruption and production curbs, in its latest monthly report, OPEC expects global oil supplies to remain stable, while cautioning that demand is becoming a growing concern.

In the latest report, OPEC said that preliminary data suggested that the global oil supply increased 490,000 barrels a day to average 98.9 mb/d in August, compared with the previous month.

OPEC projects that in 2018, non-OPEC oil supply will grow by 2.02 mmb/d despite making a downward revision of 64,000 b/d from its last report. In 2019, non-OPEC oil supply is expected to grow by another 2.15 mb/d, an upward revision of 17,000 b/d. Meanwhile, OPEC's supply is also rising.

According to secondary sources total crude oil production by OPEC members averaged 32.56 mb/d in August, an increase of 278,000 b/d over the previous month. As shown in the table below, oil output increased mostly in Libya, Iraq and Nigeria, while production declined in Iran, which is due to be hit with sanctions on its oil industry from November onwards, Venezuela, which is experiencing economic and political upheavals depressing production, and Algeria.

(Click to enlarge)

Meanwhile, oil production by OPEC's leader Saudi Arabia rose by 38kb/d to 10.4 million barrels daily, ticking up every month since May, when it and Russia signaled that they could increase output to fill any supply shortages due to incoming U.S. sanctions on Iran's oil industry.

One curious divergence: according to secondary sources, Iran's oil supply production fell by 150,000 barrels a day from July to August to around 3.5 mb/d. But according to Iran's own reporting, production was stable and unchanged production figures for the last three months, however, of 3.8 mb/d.

(Click to enlarge)

But while OPEC sees supply as stable, some clouds emerged on the demand side, where OPEC expects that in 2018 global oil demand is expected to grow by 1.62 million barrels a day, a minor downward revision from last month's projection.

"World oil demand growth in 2018 was revised downward by around 20,000 b/d, primarily as a result of the slower-than-expected performance by non-OECD Latin America and the Middle East during the second quarter of 2018" OPEC said. "Hence, world oil demand growth is now pegged at 1.62 mb/d for 2018, with total global consumption at 98.82 mb/d." Related: The Downside For Oil Is Limited

OPEC revised world oil demand growth lower for 2019 as well.

"In 2019, world oil demand growth was revised slightly lower by 20,000 from the previous month's report, primarily as a result of economic revisions to Latin America and the Middle East. World oil demand growth is now anticipated at 1.41 mb/d and total global consumption at around 100.23 mb/d."

What is becoming a growing demand-side concern to the oil market are fears that punitive U.S. tariffs on Chinese imports could weaken demand the country's demand for oil. Looking at the global oil trade, OPEC noted that while China's crude oil imports dropped in July by 70,000 barrels a day from the previous month to average 8.62 mb/d, based on an annual comparison, China's crude imports were still higher by 420,000 b/d in August, or 5 percent higher from a year ago.

As a result, demand for oil from the 15-member producing group OPEC is expected to fall the rest of 2018 and into 2019, OPEC said. In 2018, demand for OPEC crude is expected at 32.9 million barrels a day (mb/d), which is 500,000 barrels a day lower than in the previous year, the organization said.

OPEC forecasts that demand for its crude at 32.1 mb/d in 2019, around 900,000 b/d lower than a year earlier. Yet, as CNBC notes, total world oil demand in 2019 is now projected to surpass 100 mb/d for the first time and reach 100.23 mb/d.

By Zerohedge.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News