OPEC reduces forecast for global oil demand growth

Andrew Cummings
November 7, 2019

It estimates of analysts nearly tripled to an increase of 1.5 million barrels.

Oil prices rose more than 1% on Tuesday on hopes for a U.S.

Oil retreated from a 6-week high as investors weigh indications of expanding American crude inventories and mixed signals on the progress of U.S.

In a repeat of the previous two sessions, crude prices on Tuesday rose due to continued optimism over the prospect of mended relations between the USA and China, as well as word from the Organization of the Petroleum Exporting Countries (OPEC) that the oil market in 2020 may be stronger than previously forecast. Negotiators are also discussing lowering the 25% duty on about $250 billion of imports that Trump imposed past year, the people said.

Oil also drew support from the U.S. Federal Reserve's interest rate cut last week, weakness in the dollar and improved U.S.jobs growth in October, analysts said.

But the US deluge will also be supplemented by supplies from regions which had either seemed in decline or uneconomical in an era of constrained crude prices, such as offshore Norway and Brazil, as well as Canada, Guyana and Kazakhstan.

Barkindo stated this during the launch of OPEC's WOO 2040 in Vienna-Austria.

The report comes at a time when many energy market participants are increasingly concerned about a repeat of rising supply and faltering demand - the same situation that precipitated a dramatic fall in crude futures from mid-2014 to 2016.

Some members of OPEC+, including Russian Federation, are still falling short on their pledged cutbacks.

Iran's oil minister on Monday said he expects further production cuts to be agreed in December.

OPEC's current share of the global market is about 35%, a level it sees dwindling by 2025 to 32%, according to the report. US shale output growth will slow from the middle of the next decade, and then begin to decline from 2029 onward. -China trade deal, is pushing up oil markets.

Although it sees challenges from rival supplies, OPEC's outlook shows less concern about demand.

Despite OPEC and its allies agreeing to cut output in December 2018 by 1.2 million barrels a day to keep the price of crude oil afloat, prices have fallen.

Oil prices fell on Wednesday, pulled down by a larger-than-expected build in US crude stocks and weak euro zone economic figures, after gaining for three sessions on expectations of an easing in US-China trade tensions.

OPEC published an outlook that suggests a shrinking oil market and lower oil demand growth.

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