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Abu Dhabi: Ali Asaad
The International Finance Institute reported in a report on the oil market that the average price per barrel of Brent this year was $ 65 and that it had dropped to 62 the next year in its last report on the world oil market released yesterday.
In the United States, oil exploration companies reduce their capital expenditures, slow the growth of the oil supply. Oil supply growth outside the OPEC countries and growth in global oil demand in 2019 and 2020 will offset pressures, the institute said in its report. Oil prices are on the rise because of rising geopolitical tensions that could disrupt a significant portion of oil and gas energy supplies.
In its forecast for the global oil market, the IIR takes into account the oil futures index, as well as the geopolitical situations and tensions affecting and influencing global oil markets. Brent crude forward prices indicated that prices would reach $ 61.6 per barrel on average in 2019.However, at the IIR, we still expect Brent oil to average $ 65 per barrel in 2019 and $ 62 per barrel in 2020. He estimates that global stocks of liquid fuels could increase by 0.15 million barrels per day this year and by 0.35 million barrels per day by 2020.
The Institute predicted that the supply of oil and condensate would decrease this year from last year by 0.11% (a decrease of 120,000 barrels) to establish at 100.22 million barrels a day, and that it would increase by 1.07% (an increase of 1.18 million barrels) per day, reaching 101.3%. Millions of barrels a day.
On the demand side, the Institute predicted slower growth in oil demand. The volume of demand is expected to increase by 1% (from 1 million barrels) to 100.30 million barrels per day in 2019 and global demand will increase by less than 0.89% currently (0.8%). ). 0.9 million barrels) to 101.2 million barrels by 2020.
The lower forecast for inventory builds reflects a decline in OPEC oil production as a result of the July deal reached between 14 OPEC members and a group of 10 major non-OPEC producers led by Russia to extend the agreement to reduce oil production until March 2020.
In the United States, the shale industry faces the challenge of maintaining growth in production despite reduced capital expenditures. The increase in production over the last three years has resulted in higher costs, and we expect US crude oil production to increase from 1.6 million barrels per day in 2018 to 1.3 million barrels per day. in 2019 and 0.9 million barrels per day by 2020. US companies have led to the closure of less profitable platforms and the number of US oil rigs has increased to 772 as of August 9 .
Contrary to the forecasts of the International Energy Agency and OPEC, the IIF expects a slowdown in the growth of global oil demand, which will rise from 1.4 million bpd in 2018 to 1 million bpd in 2019 and 0.9 million bpd in 2020. Before emerging and developing economies, however, unlike the last decade, the leading player in 2018 was United States, where the demand for oil had increased by 0.5 million barrels, the largest increase since 2004.
Pressure factors on oil prices
Fears of a slowdown in global demand have overshadowed the evolution of global supply, easing tensions over oil prices due to geopolitical tensions in the Strait of Ormuz, where a Fifth of the oil supplies is routed to global markets, said the International Finance Institute. Global growth is leading to slower growth in global oil demand in 2019 and 2020.
"By acting on factors that push oil prices to a rising trend in the short term, the institute said that they would further reduce the Iranian and Venezuelan supply, Libyan production. because of the internal conflict and reach a US-China tariff agreement before the end of the year. The US Federal Reserve has agreed to further rate cuts, which could boost global growth and thus increase demand for oil consumption.
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