Friday October 25, 2019
1. OECD oil demand declines
- Last year, oil demand in Germany was weak and France posted an outright contraction, but demand rose in Italy and the UK.
- This year saw the reverse, with gains in Germany and France, but declines in Italy and the UK. “Italian oil demand has fallen y/y in 10 consecutive months, with the decline exceeding 10% in five of those months,” Standard Chartered wrote in a note.
- In August, demand contracted in all four countries – that has only happened four times over the last five years. “The combined fall of 410 thousand barrels per day (kb/d) is the second-weakest reading in six years, only exceeded in March 2019,” Standard Chartered said.
- In fact, total OECD oil demand fell by 463,000 bpd in August, the fourth consecutive month of year-on-year declines. That marks the weakest stretch for demand growth in the OECD in the last five years.
2. Canada oil sees slight setback in election
- Canadian Prime Minister Justin Trudeau survived reelection, although lost his majority. He will need to partner with a party to his left, which potentially creates new hurdles for Canada’s oil industry.
- “The lack of pipeline capacities is likely to slow the growth in Canadian oil production,” Commerzbank said in a note.
- Alberta announced mandatory production cuts that started in January 2019, a move that helped rescue depressed…