OPEC lowers forecast for oil demand growth, says its own market share is dwindling

The report comes at a time when many energy market participants are increasingly concerned about a repeat of rising supply and faltering demand — the same situation that precipitated a dramatic fall in crude futures from mid-2014 to 2016.

Since October 2018, when Brent crude futures climbed to a peak of just over $86, the international benchmark has fallen nearly 30%. U.S. West Texas Intermediate has fallen almost 20% over the same period.

“What we had in 2014 was fundamentally different from what we are facing today. Whereas in 2014 we had no mechanism to face the onslaught of the cycle that had started, today, we have a tested and proven mechanism,” Barkindo said.

“So, we are not concerned as such … We are also committed to remain reliable and dependable suppliers of crude oil and liquids going forward,” he added.

Brent crude traded at $62.63 a barrel on Tuesday afternoon, while U.S. WTI stood at $56.95.

The WOO presents the OPEC Secretariat’s medium-term and long-term analysis of the energy market, as well as projections for the global economy.

OPEC expects oil demand to continue growing at “relatively healthy rates” over the next five years, predicting an increase of 6.1 million b/d when compared to the 2018 level.

The average growth will be about 1 million b/d over the medium-term period, OPEC said, with incremental demand likely to come primarily from non-OECD countries.

Over the long-term, global oil demand is projected to climb by about 12 million b/d, rising from 98.7 million b/d in 2018 to 110.6 million b/d in 2040. India is thought to be the country with the fastest oil demand growth and the largest additional demand over the next two decades.

“At the global level, growth is forecast to slow from a level of 1.4 million b/d in 2018 to around 0.5 million b/d towards the end of the next decade,” OPEC said in the report.

“We are looking at a big increase in non-OPEC supply in the next few months, not just the United States — which is still continuing to grow — but we are seeing a big surge from Brazil and Norway and one or two other countries,” Neil Atkinson, head of the oil industry and markets division at the International Energy Agency (IEA), told CNBC’s “Squawk Box Europe” on Monday.

“Meanwhile, growth in demand is slowing because of the poorer economic climate. So, we see a return to a major surplus at the beginning of next year.”

The IEA’s Atkinson said OPEC+ would have to decide whether further production cuts would be necessary when it meets in early December.

He added the group would have to decide with the knowledge that the pressure on prices “is clearly going to be downwards rather than upwards.”

The OPEC’s WOO said oil accounted for more than 31% of global energy demand in 2018, ahead of coal (27%) and gas (23%).

And, over the next 20 years, oil is forecast to remain the largest contributor to the energy mix, accounting for more than 28%.

Natural gas was expected to become the second-largest energy source, according to OPEC, reaching a share of 25% in the total primary energy mix in 2040.

“Demand increases for gas will come primarily from Asia, led by China and India, as well as OPEC Member Countries,” the group said.

OPEC said electric cars sales were “gaining momentum,” despite representing a very small share of the global fleet at present. They are expected to account for almost half of all new passenger cars in OECD countries by 2040, with almost a quarter of those in China and more than 26% globally.

US and OPEC supply has ‘extinguished’ any remaining upside potential for oil prices

The Best Option For Getting Quality Positive Reviews For Your Business.