Monday , January 30 2023

Opec: Be careful of oil surplus.


OPEC warned of an oversupply of oil around the world, with demand forecasts dropping 700,000 barrels per day next year. This strengthens the view that the UAE and Saudi Arabia are reducing supply in order to balance supply and demand in 2019.

According to OPEC's monthly report, the world's oil demand in 2019 was 1.29 million barrels a day, down by 700,000 barrels month on month. Non-OPEC supplies are expected to increase by 2.3 million barrels (bdp) next year.

Saudi Arabia and the United Arab Emirates (UAE) have said that global oil inventory cuts are inevitable. US President Donald Trump urged OPEC members not to cut supplies as oil prices fell 2 percent.

Most of the new supply for next year comes from non-OECD countries that will charge an additional 2.3 million bpd to the market.

Oil demand growth in 2018 is expected to increase by 1.5 million barrels a year, down 40,000 barrels due to weaker demand in the Middle East and lower levels. Total oil demand expected in the third quarter of 2018 Is expected to reach 98.79 million barrels.

The Opec group will meet in Vienna on 6 December and set a policy for 2019.

Anita Yadav, director of fixed income research at the Emirates NBD, said sanctions that could affect supply levels in Opec and non-OPEC member states, global GDP growth, the US dollar strength, geopolitical issues and oil supply in the region will likely increase oil prices next year Indicate.

Emirates NBD, headquartered in Dubai, expects oil prices to average $ 73 per barrel in 2018.

"Our expectations for oil prices in 2019 are similar, with bargains ranging from $ 70 to $ 75, assuming that demand will increase by about 1 percent per year.

Manoj Krishnan, head of personal property of Continental Financial Services, thinks that the biggest single issue of oil is the unpredictable trade war impact for now. "We need at least one to two quarters and it affects the overall global economy."

He predicted that prices would be between $ 65 and $ 73 per barrel in the first half of next year before becoming more technologically clear.

Jameel Ahmad, Global Director of Forex Strategy and Market Research, said the agreement at the OPEC meeting would be about 31.5 million barrels of oil demand next year, 33 to 34 million barrels per day more than the current world production.

"At present, actual production may be higher than this level. Overall, the market environment and conditions surrounding oil are unpredictable as the situation changes dramatically, which is why oil prices have been moving so irregularly in recent weeks He said.

Ahmad said demand is likely to be one of the key factors that will affect market changes in the oil market, which is heading towards next year.

He warned of a slowdown in economic growth, which implies that the downturn in global economic conditions could lead to a decline in demand for oil next year, but not yet fully reflected in oil prices.

On Tuesday, the International Energy Agency predicted that oil demand would peak in 2040. But the world warned that it could face a supply crisis without investing enough in new production.

The IEA said there will be 300 million electric vehicles by 2040. The car expects to reduce 3.3 million barrels per day demand from the 2.5 million barrels expected from the world energy outlook.

The IEA predicts that natural gas will overtake coal as the world's second largest energy source by 2030. Global gas demand will increase by 1.6% by 2040 and by 45% from current levels. China, the world's largest oil and coal importer, is expected to become the largest importer of gas in the near future.

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