OPEC released a statement on Friday stating that it expects a downbeat oil-market for the rest of 2019, with there being a major slow-down in economic growth, whilst also facing numerous challenges in 2020, with rivals wanting to pump more oil, resulting in OPEC having to restrain supplies even more to control the market.
In a monthly report published on Friday, the Organisation of the Petroleum Exporting Countries (OPEC), lowered its forecast for oil demand growth for the rest of 2019 by 40,000 per day, whilst also indicating that the market will oversee a slight surplus during 2020.
This negative outlook has been brought up as a result of the ongoing United States and China trade dispute, along with the uncertainty surrounding Brexit, with both of these situations possibly resulting in OPEC as well as the organisation’s allies, such as Russia, to cut output in order to increase prices.
In the report published, OPEC stated that “While the outlook for market fundamentals seems somewhat bearish for the rest of the year, given softening economic growth, ongoing global trade issues and slowing oil demand growth, it remains critical to closely monitor the supply/demand balance and assist market stability in the months ahead.”
The demand for OPEC crude will be averaging at around 29.41 million barrels per day in 2020, which is a decrease of 1.3 million barrels per day from this year. However, OPEC still raised the 2020 forecast by 140,000 barrels per day from last month’s forecast for the coming year.
Last month, OPEC along with its allies managed to renew a supply-cutting pact which will last until March 2020, with this aiming to avoid a build-up of inventories which could lower oil prices.