OPEC forecasts global oil demand to decline in 2019

World oil demand is forecast to decline next year, as growth in consumption rate slows and as rivals pump more crude, OPEC said in its latest monthly oil report.

Oil demand will grow by 1.45 million barrels per day (mpd) in 2019 year-on-year, compared to 1.65 mpd in 2018, it noted.

According to the Organization of the Petroleum Exporting Countries, the world will require 32.18 million barrels per day (mpd) of crude next year, down 760,000 bpd from this year. However, it kept 2018 projections for global oil demand unchanged from May, estimating demand to average 98.85 mpd.

Non-OPEC oil supply is projected to expand by 2.1 mpd, to average 61.64 mbd next year. The main growth drivers are expected to be the US, followed by Brazil, Canada, Australia, Kazakhstan and the UK.

Meanwhile, OPEC's June production rose to 32.33 million bpd, above the demand forecast, as Saudi Arabia pumped more to make up for shortfalls elsewhere and temper rising prices.

Saudi Arabia's oil production rose by 405,000 barrels per day (bpd) to average 10.42 mpd)in June, according to secondary sources. However, the Kingdom’s direct communication showed an increase of 459,000 barrel per day (bpd) to 10.49 mpd.

In June, OPEC+ had agreed on a combined increase in crude oil output of 1 million bpd from this month following calls from major consumers to help reduce prices and avoid a supply shortage.

Earlier this month, King Salman told US President Donald Trump that the Kingdom maintains a spare capacity of 2 mpd, which it can use if required to ensure market stability and balance.

Media reports also suggested Saudi Aramco, the world's largest oil producer, is planning to boost production in July to about 10.8 mpd, surpassing the previous high of 10.72 mpd in November 2016.

According to the oil cartel’s July report, total OPEC crude oil production averaged 32.33 mpd last month, an increase of 173,000 bpd over May. The output increased mostly in Saudi Arabia, Iraq, Nigeria, Kuwait and the UAE, but fell in Libya, Venezuela and Angola.

The report estimated OPEC’s NGLs and non-conventional liquids production will grow by 120,000 bpd to average 6.37 mpd, but declining by 70,000 bpd.

Meanwhile, the report revised non-OPEC oil supply growth up by 180,000 bpd to average 59.54 mpd, an increase of 2 mpd year-on-year, following an upward revision for the US supply and potentially higher supply from Russia in the second half of 2018.