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OPEC revised slightly down on Monday its estimates for global oil demand growth in 2018 and 2019, while it revised up—for yet another month—its forecast for non-OPEC supply growth.
In its Monthly Oil Market Report published on Monday, OPEC revised down its oil demand growth forecast for 2018 by 20,000 bpd from the previous month’s projection and now sees the world demand for oil increasing by 1.64 million bpd, due to weaker-than-anticipated demand in Latin America and the Middle East in the second quarter. Total global oil demand is expected to reach 98.83 million bpd this year, OPEC’s latest estimates show. For 2019, global oil demand growth is expected to slow down from 2018, with growth forecast at 1.43 million bpd, some 20,000 bpd lower than OPEC’s prediction last month. Next year, total world oil consumption is anticipated to cross the 100-million-bpd mark and reach 100.26 million bpd.
In 2019, the Americas will be the key OECD demand growth driver, while China and India will see the highest oil demand growth levels among non-OECD countries, according to OPEC.
Referring to non-OPEC oil supply, OPEC revised up its forecast for 2018 by 73,000 bpd from the previous MOMR to 59.62 million bpd this year, an increase of 2.08 million bpd year-on-year, mostly due to higher-than-forecast Chinese supply. For 2019, the United States, Brazil, Canada, the United Kingdom, Kazakhstan, Australia, and Malaysia will be the main growth drivers, while Mexico and Norway are expected to see the largest declines, OPEC said, but noted that “the 2019 forecast is subject to many uncertainties.”
“However, if any unexpected supply outages should occur due to natural disasters/technical shortcomings and these coincide with any geopolitical supply disruption, it could bring the market into an imbalanced situation,” the cartel warned. “Furthermore, investment has not yet returned to the levels seen prior to the price crash of 2014,” OPEC said.
Related: Can China Afford To Slap Tariffs On U.S. Oil?
Apart from warning about insufficient investments and a much tighter oil market in case of several supply disruptions at a time, OPEC cautioned that its current projections for the global economy are based on “no significant rise in trade tariffs” and the assumption that “current disputes will be resolved soon.”
“Rising trade tensions, leading to mounting uncertainties, translating into falling business and consumer sentiment, may provide a significant downside risk to the current relatively positive outlook. Negative impacts on global investments, capital flows and consumer spending may also have a detrimental effect on the global oil market.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.