OPEC Lowers 2019 Global Oil Demand Growth Forecast

Oil demand is expected to expand by less than previously anticipated this year due to soft oil demand data in the Organization for Economic Cooperation and Development region, according to a report published by OPEC on Thursday.

World oil demand is expected to rise by 1.14 million barrels per day in 2019, according to the Organization of Petroleum Exporting Countries’ latest monthly oil market report. This is 0.07 million barrels per day less than OPEC’s forecast a month earlier, a revision which the bloc attributed to “sluggish oil demand data” in the OECD region during the first quarter of 2019.

The majority of oil demand growth is projected to originate from the region referred to as Other Asia, which led by India, followed by China and OECD Americas. Oil demand growth in OECD countries is projected to rise by 0.14 million barrels per day, while non-OECD countries are expected to drive oil demand growth by adding one million barrels a day in 2019.

OPEC left its assessment of oil demand growth in 2018 unchanged at 1.41 million barrels per day, saying that OECD Americas led growth in the OECD region, on the back of strong gains for light and middle distillates throughout 2018. Other Asia led demand growth in the non-OECD region and globally, after what OPEC described as “strong” product demand growth in India, Indonesia, Singapore and Thailand.

Non-OPEC oil supply in 2019 is expected to grow at a pace of 2.14 million barrels per day year-on-year, a level which is unchanged from OPEC’s projection in May, following an increase of 2.91 million barrels per day in 2018, the report stated.

The US is expected to remain the main driver of non-OPEC supply growth in 2019, adding 1.83 million barrels per day year-on-year, followed by Brazil, Russia, China, Australia and the UK. At the same time Mexico, Norway, Kazakhstan, Indonesia and Vietnam are projected to see the largest declines.

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