OPEC cuts 2020 oil forecast, urges effort to avert new glut
OPEC’s Secretary-General Mohammed Sanusi Barkindo. The group has cut its forecast for global oil demand in 2020, and has warned of a new glut on the horizon.
September 12, 201901:49
Saudi Arabia pumps less than quota as OPEC+ producers seek to keep market in balance
LONDON: OPEC on Wednesday cut its forecast for growth in world oil demand in 2020 due to an economic slowdown, an outlook the producer group said highlighted the need for ongoing efforts to prevent a new glut of crude.
In a monthly report, the Organization of the Petroleum Exporting Countries said oil demand worldwide would expand by 1.08 million barrels per day (bpd), 60,000 bpd less than previously estimated.
The weaker outlook amid a US-China trade war and Brexit could press the case for OPEC to maintain or adjust their policy of cutting output.
The report lowered OPEC’s forecast for world economic growth in 2020 to 3.1 percent from 3.2 percent and said next year’s increase in oil demand would be outpaced by “strong growth” in supply from rival producers such as the US.
“This highlights the shared responsibility of all producing countries to support oil market stability to avoid unwanted volatility and a potential relapse into market imbalance,” the report said.
OPEC, Russia and other producers, in an alliance called OPEC+, have since Jan. 1 implemented a deal to cut output by 1.2 million bpd. Despite the OPEC-led cut, oil has tumbled from April’s 2019 peak above $75, pressured by trade concerns and an economic slowdown.
The report said oil inventories in industrialized economies fell in July, a development that could ease OPEC concern over a possible glut.
Even so, stocks in July exceeded the five-year average by 36 million barrels.
OPEC and its partners have been limiting supply since 2017, helping to clear a glut that built up in 2014-