Daily Management Review

IEA: Global oil supplies will decrease in 2019


The international energy agency said that the global oil market may face a deficit earlier than expected, thanks to an OPEC + agreement and Canada’s decision to cut supplies, Reuters writes.

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In its monthly report on the oil market, IEA left the growth forecast for world demand for 2018 and 2019 unchanged compared with the previous month at the level of 1.3 million and 1.4 million barrels per day (bpd), respectively.

"Our forecast of growth in demand for 2019 remains at 1.4 million bpd, despite the fact that oil prices have dropped significantly since the beginning of October," the agency said.

Oil prices fell by almost a third this quarter to about $ 61 a barrel from a four-year peak near $ 87 reached in early October.

"Some support provided by lower prices will be offset by a slowdown in global growth, especially in some emerging economies," the IEA said.

"Uncertainty about trade tensions and monetary tightening continue to affect trust and investment. Lower OECD expectations for the global economy in 2019 can reduce the growth in oil demand by about 100,000 bpd," the report states.
OPEC and other oil producers, including Russia, last week agreed to cut production by 1.2 million bpd starting from January.

In addition, the authorities of the Canadian province of Alberta decided to oblige the oil companies to reduce production by 325 thousand bpd from January to eliminate surplus stocks of raw materials.

In November, the IEA predicted that the global oil market would remain in surplus during 2019. Now the agency expects the deficit to arise by the second quarter of next year, provided that OPEC adheres to its supply agreement.

Oil production in OPEC countries declined in November, as a sharp decline in Iranian supplies offset the jump in production in Saudi Arabia.

The volume of OPEC oil production last month fell by 11 thousand barrels per day relative to October and amounted to 32.965 million bpd, data of secondary sources showed in the organization’s monthly report.

source: reuters.com