OPEC Forecasts Lower 2019 Crude Oil Demand

OPEC forecasts world demand for its crude will decline next year as growth in consumption slows and rivals pump more, pointing to the return of an oil market surplus worsened by an OPEC-led pact to boost supplies.

Giving its first 2019 forecasts in a monthly report, the Organization of Petroleum Exporting Countries said the world would need 32.18 million barrels per day of crude from its 15 members next year, down 760,000 bpd from this year, Hellenic Shipping reported.

The drop in demand for OPEC crude means there will be less strain on producers such as Saudi Arabia in appeasing US demands and making up for supply losses such as falling Venezuelan and Libyan output.

“Following the robust growth seen this year, oil market developments are expected to slightly moderate in 2019, with the world economy and global oil demand forecasts to grow slightly less,” OPEC said in the report.

Oil topped $80 a barrel this year for the first time since 2014, boosted by OPEC-led output cuts and involuntary supply losses. However, US President Donald Trump has been urging Saudi Arabia and OPEC to raise output to cool prices.

OPEC and a group of non-OPEC countries agreed on June 22-23 to return to 100% compliance with oil output cuts that began in January 2017, after months of underproduction by Venezuela and others pushed adherence above 160%.

The strong pace of oil demand that helped OPEC balance the market is expected to wane next year. OPEC expects world oil demand to grow by 1.45 million bpd, down from 1.65 million bpd in 2018, and said any upside could be accommodated.

“If the world economy performs better than expected, leading to higher growth in crude oil demand, OPEC will continue to have sufficient supply to support oil market stability,” the OPEC report said.

Oil prices maintained an earlier decline on Wednesday after the release of the OPEC report, trading around $77 a barrel.