0 Persons

Oil Market Forecasters Bearish on 2019

Feb 17, 2019, 12:18 PM
News ID: 28112
Oil Market Forecasters Bearish on 2019

EghtesadOnline: The three most closely watched oil market forecasters are all bracing for a significant upsurge in non-OPEC supply growth in 2019 but differ on the extent that global oil supply will outweigh demand.

The US Energy Information Administration envisages global demand growth in 2019 rising by 1.49 million bpd to 101.45 bpd, higher than its peers, but its estimate for supply growth is near 2 million bpd, Platts reported.

The market is expected to be in deficit by almost 500,000 bpd in 2019, according to the EIA, as output from OPEC/non-OPEC deal participants and Canada, factoring in sanctions on Venezuelan and Iranian oil flows, will not be enough to offset US supply growth.

The Paris-based International Energy Agency expects oil consumption in 2019 to rise to 100.6 million bpd from 99.2 million bpd last year, growth of 1.4 million bpd, according to Financial Tribune.

Unlike other agencies, it sees global demand growing faster this year than in 2018 due to "lower prices and the start-up of petrochemical projects in China and the US."

The IEA, however, said oil markets will still struggle to absorb fast-growing non-OPEC supply despite sanctions on Iran and Venezuela and falling OPEC production in 2019.

In terms of oil demand growth, OPEC was the most bearish in its monthly oil market report, predicting a rise of only 1.24 million bpd, with global consumption at 100 million b/d this year.

The continued strong growth of US shale oil will soften the blow from the recent US sanctions on Venezuela's state-owned oil company PDVSA, the IEA said.

"Even so, headline benchmark crude oil prices have hardly changed on news of the sanctions," the IEA said in its recent monthly market report. "This is because, in terms of crude oil quantity, markets may be able to adjust after initial logistical dislocations."