Daily Management Review

IEA lowers forecast for oil demand growth for 2019


The International Energy Agency (IEA) lowered its estimate for oil demand growth in 2018 and 2019.

This year, the world will need very little additional oil from OPEC, as growth in US production will offset reduced supplies from Iran and Venezuela, the agency said.

Estimated growth in oil demand in 2018 was reduced by 70 thousand barrels per day to 1.2 million bpd.

The forecast of oil demand growth for the current year has been reduced by 90 thousand bpd to 1.3 million bpd. The global demand for oil, according to IEA estimates, will average 100.4 million bpd in 2019.

"The changes reflect lower-than-expected data for 2018 in large consuming countries, such as Egypt, India, Indonesia and Nigeria," the IEA said in a statement.

Data for this year showed that demand in Brazil, China and Japan turned out to be lower than agency estimates. Due to unexpectedly weak demand, oil reserves in I quarter increased by 700 thousand bpd.

The increase in supply from oil producers outside OPEC, especially the United States, in the second quarter will ensure sufficient supply in the world market.

Oil and condensate production in the United States this year is expected to grow by 1.7 million bpd.

Worldwide deliveries of oil in April fell by 300,000 bpd, helped by falling supplies from Canada, Kazakhstan, Azerbaijan and Iran.

OPEC oil production rose by 60 thousand bpd to 30.21 million bpd against the background of increased production in Libya, Nigeria and Iraq, the IEA reported.

In April, OPEC countries produced about 440 thousand bpd less oil than agreed in the OPEC + transaction. Oil production in Saudi Arabia was 500 thousand bpd below the agreed level.

The agency expects that the demand for OPEC oil will be 30.9 million bpd in the second quarter and will drop to 30.2 million bpd in the second half of the year.

Oil production in Iran has already fallen to its lowest level since September 2013 - 2.6 million bpd. This month, production in the country could fall to a minimum since the 1980s due to US sanctions, the IEA warned.

source: reuters.com