On Wednesday, Opec downgraded its forecasts of rising world demand for oil in 2020 due to economic slowdown, a group of producers said it stressed the need for continued efforts to prevent a new crude noise.
The weaker outlook between a US-China trade war and Brexit could push the case for OPEC and its allies to maintain or adjust their policy to cut output. Iraq said ministers would discuss on Thursday whether deeper cuts were needed.
In a monthly report, the Organization of Petroleum Exporting Countries said demand for oil worldwide would expand by 1.08 million barrels a day, 60,000 bpd less than previously estimated, and indicated that the market would be excessive.
The report says oil inventories in industrialized economies fell in July, a development that could ease OPEC’s concern about a potential rally.
OPEC, in its report, lowered its forecast for world economic growth in 2020 to 3.1% from 3.2% and said next year’s increase in oil demand would be outweighed by “strong growth” in supply from rival producers such as the United States.
“This underscores the shared responsibility of all producing countries to support the stability of the oil market to avoid unintended volatility and a possible recovery of market imbalance,” the report said.
OPEC and its partners have been restricting supply since 2017, helping to clear a pile that was created in 2014-2016 when manufacturers pumped at will, and raising prices.
The policy has given steady force to American shistans and other rival supplies, and the report suggests that the world will need less OPEC crude next year.
Top exporter Saudi Arabia told OPEC that the kingdom raised August production by just over 200,000 bpd to 9,779 million bpd. Saudi Arabia continues to pump far less than its 10,311 bpd quota.
Thanks in part to the Saudi restriction, manufacturers are still respecting the supply agreement. Losses in Iran and Venezuela, two OPEC members facing US sanctions, have widened supply cuts. The August surge, however, puts OPEC’s output ahead of demand forecast for 2020.
The report suggests there will be a 340,000 bpd supply surplus for 2020 if OPEC continues to pump at the August pace and other things remain equal, more than the surplus forecast in last month’s report./Investing.com