The global oil supply is expected to overwhelm demand in 2019 despite cuts in production – AIE

Company News of Wednesday, February 13, 2019

Source: Myjoyonline.com

2019-02-13

The global oil market will struggle to absorb this high-growth supply from non-OPEC countries, despite cuts in the group's production and US sanctions against Venezuela and Iran, the International Agency said Wednesday. Energy.

The IEA has left its demand growth forecast for 2019 unchanged from its latest report in January, at 1.4 million barrels a day.

"It is supported by lower prices and the start of petrochemical projects in China and the US However, the slowdown in economic growth will limit any increase," said the agency.

The IEA has raised its estimate of crude supply growth outside the Organization of Petroleum Exporting Countries to 1.8 million bpd in 2019, compared to 1.6 million bpd before.

The agency has also lowered its forecast for OPEC crude oil demand. The group is committed to reducing this year 's 800,000 bpd under an agreement with Russia and other non – OPEC producers such as the United States. Oman and Kazakhstan.

The OPEC crude oil appeal is now estimated at 30.7 million bpd in 2019, down from the latest IEA estimate of 31.6 million bpd in January.

The sanctions imposed by the United States on Iran and Venezuela have stifled the supply of heavier and more acidic crude that tends to produce larger volumes of higher value distillates, as opposed to the larger ones. 39; gasoline. This decision disrupted some refiners, but did not result in a dramatic increase in the price of oil in 2019.

"In terms of the amount of crude oil, the markets might be able to adjust after the first logistical upheavals (related to sanctions imposed by Venezuela)," said the IEA, based in Paris.

"Stocks in most markets are currently large and … there is more production capacity available."

Venezuela's output almost halved in two years to 1.17 million bpd, as the economic crisis decimated its energy sector and US sanctions crippled its exports.

Brent crude futures rose 20% in 2019 to about $ 63 per barrel, but most of this increase occurred in early January. The price has largely capped since then, despite the subsequent imposition of US sanctions.

"Oil prices have not increased alarmingly because the market is still operating thanks to the accumulated surpluses in the second half of 2018," said the IEA.

"Quantitatively, by 2019, the United States alone will increase crude oil production relative to Venezuela's current production. In terms of quality, it is more complicated. Quality matters. "

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