The IEA in its monthly report said that “With oil prices currently about 20% lower than a year ago, there will be consumer support.”
On Thursday, the International Energy Agency, accompanied by lower prices brought on by plentiful supply, as the United States briefly destroyed Saudi Arabia as the world’s top exporter, said global oil demand was badly ahead economy.
Assuming there will be no further breakthrough in US-China trade talks and citing a easing of tensions over Iran, the Paris-based agency maintained its assessment of global oil demand growth in 2019 at 1.1 million bpd and 1.3 million bpd for next year.
He added a backlash to US production following the Dorian hurricane, coupled with the steep increase in production from Brazil and the North Sea, set to boost production from outside the Organization of Petroleum Exporting Countries sharply.
Non-OPEC production growth is seen to rise to 2.3 million ppd in 2020, up from 400,000 this year. OPEC’s oil demand, meanwhile, is set to hit 28.3m bpd in the first half of 2020, 1.4m bpd less than the group produced in August.
The discrepancy could prompt OPEC and its allies including Russia to revise their curb on production.
“The implied market balance will turn into a significant surplus and putting pressure on prices,” the IEA said. “The challenge of market management remains a concern for 2020.”/Investing.com