Opec sees 'somewhat bearish' market in coming months

Opec has trimmed its global 2019 oil demand growth forecast and made a slightly sharper cut to its non-Opec supply increase projection. It called the market outlook "somewhat bearish" for the rest of 2019.

Opec's latest Monthly Oil Market Report (MOMR) puts global oil demand growth at 1.1mn b/d this year, or 40,000 b/d slower than it anticipated in July, putting its estimate for overall demand at 99.92mn b/d in 2019.

Opec kept its 2020 world oil demand growth forecast at 1.14mn b/d, in line with last month's projection, for total consumption of 101.05mn b/d, but it said this "is subject to downside risks stemming from uncertainties with regard to global economic development."

"While the outlook for market fundamentals seems somewhat bearish for the rest of the year, given softening economic growth, ongoing global trade issues and slowing oil demand growth, it remains critical to closely monitor the supply/demand balance and assist market stability in the months ahead," Opec said. The Joint Ministerial Monitoring Committee (JMMC), which oversees compliance with the Opec and non-Opec production cut agreement, meets on 12 September in Abu Dhabi.

Opec sees non-Opec supply growing by 1.97mn b/d this year, or 72,000 b/d slower than it expected in July, to an average 64.39mn b/d. It said there was lower-than-expected oil production in the US, Brazil, Thailand and Norway in the first half of the year, and this was partially offset by higher production in Canada in the second quarter.

Opec revised down its non-Opec oil supply growth forecast for 2020, by 50,000 b/d, because of a downward revision for Brazil. It now expects non-Opec supply to increase at an average 2.39mn b/d next year, for a total of 66.78mn b/d.

The report revised up by 100,000 b/d its call-on-Opec crude for this year and next, to 30.7mn b/d and 29.4mn b/d respectively. All other things being equal, Opec now sees demand for its crude being more than its members' current combined production for the second half of this year, but not for 2020 as a whole.

Citing secondary sources, which include Argus, the MOMR said OPEC crude production fell by 246,000 b/d from June to average 29.61mn b/d in July.

Saudi Arabia told the Opec secretariat it reduced output by 202,000 b/d in July from June, to 9.58mn b/d, the lowest in more than five years; Angola cut by 159,000 b/d to 1.26mn b/d and Venezuelan output fell by 141,000 b/d to 906,000 b/d, the lowest since the strike-affected January 2003. Nigeria said it boosted production by 146,000 b/d to 1.95mn b/d.