OPEC estimates that seasonally strong oil demand is expected for the second half of 2019, supported by the recent draws in U.S. crude oil stocks, according to its monthly oil market report released Thursday.
Despite some uncertainty with a forecast of steady economic growth remaining at 3.2% in 2019 and 2020, global oil demand growth is forecast at 1.14 million barrels per day (mb/d) for both 2019 and 2020.
"In 2020, the initial forecast indicates growth of around 1.14 mb/d year-on-year, as global oil demand is anticipated to surpass the 100 mb/d threshold on an annual basis, to average 101.01 mb/d for the year," according to OPEC's report.
The report also underlined the majority of the forecasting agencies revised down their global oil demand projections for 2019, highlighting uncertainties about trade disputes and their impacts on energy demand.
"Subdued performances in global equity markets also weighed on oil futures prices," OPEC said.
Saudi Arabia plans to keep its crude oil production under 10 mb/d in August, with exports averaging below 7 mb/d, to avoid any excess build in stocks, the report said.
In addition, non-OPEC supply has been revised down in the latest monthly report, mainly due to the extension of the voluntary production adjustments by participating countries of the Declaration of Cooperation (DoC) and with downward revisions for Brazil and Norway.
The report also highlighted the strong commitment of the DoC members that was reaffirmed at the 6th OPEC and Non-OPEC Ministerial Meeting by extending voluntary output adjustments for an additional nine months to March 31, 2020.
"The ongoing over-conformity by DoC members to their voluntary adjustments in production is a testament to their undying commitment to the process of market stabilization. OPEC and its non-OPEC partners of the DoC will continue to remain vigilant in promoting a sustainable stability," the statement read.
The Joint Ministerial Monitoring Committee has scheduled its next meeting for September 2019 in Abu Dhabi.
By Gulsen Cagatay