In its Monthly Oil Market Report for September, released Wednesday morning, the Organization of the Petroleum Exporting Countries (OPEC) noted that the cartel’s average price for its reference basket fell by $1.01 to $72.26 a barrel in the month of August. Year to date, OPEC’s reference basket is up $19.86 per barrel.
The cartel said OPEC production in August, as reported by secondary sources, rose month over month by 278,000 barrels a day to a daily average of 32.57 million barrels. Saudi Arabia’s August production rose to 10.4 million barrels a day, a month-over-month increase of about 38,000 barrels a day.
The Saudis themselves reported total production of 10.412 million barrels a day in August, up by about 124,000 compared to July. Under the production cuts initiated in January, Saudi Arabia’s quota is 10.058 million barrels a day.
Global demand is forecast to average 98.82 million barrels a day in 2018, down by 20,000 barrels from the July estimate. The current estimate for 2019 global demand is 100.23 million barrels a day, down by 30,000 from last month’s estimate.
Global demand growth for 2018 was forecast at 1.62 million barrels a day, down by 20,000 from the prior month’s estimate. The cartel’s projected demand growth for 2019 is now 1.41 million barrels a day, down by 20,000 since last month’s report.
The cartel estimated 2018 non-OPEC supply rose by 73,000 barrels a day to 59.62 million barrels a day. For 2019 non-OPEC supply is expected to rise by 2.13 million barrels a day to an average of 61.75 million barrels a day, an increase of 30,000 compared with last month’s estimate.
U.S. production growth in 2018 is now expected to rise by 1.74 million barrels a day, up by 50,000 from last month’s forecast. The cartel’s estimate of total U.S. production in 2019 increased slightly from 17.44 million barrels a day to 17.52 million.
2018’s estimated demand for OPEC crude was unchanged at 32.9 million barrels a day, down by some 500,000 compared to 2017. Demand in 2019 is now estimated at 32.1 million barrels a day, down by around 900,000 from the 2018 level and up by 100,000 barrels compared to last month’s estimate.
Crude prices were higher Wednesday morning, with benchmark West Texas Intermediate for October delivery trading up about 1.3% at $70.17. Brent crude for October delivery traded up about 0.5% at $78.97.