The Organization of the Petroleum Exporting Countries (OPEC) saw the price of its reference basket of crude oil components rise by 4.6% in September to $62.36 a barrel, following an August decline of nearly 8%. The drone attack on Saudi Arabian oil facilities in mid-September sent crude prices skyrocketing for a brief period.
OPEC now expects demand for crude to drop from its previous estimate for year-over-year growth of 1.02 million barrels a day to 980,000 barrels. OPEC attributed the downward revision to new data from the OECD on demand from the Americas and Asia Pacific. The cartel also maintained its projection for 2020 demand growth at 1.08 million barrels. OPEC cut its 2020 demand growth projection by 60,000 barrels in last month’s report.
The data was published Wednesday in OPEC’s Monthly Oil Market Report for October. The cartel continues to expect 3% global GDP growth in 2019, commenting that “slowing growth momentum in the US will carry over into 2020, while ongoing uncertainties surrounding the EU, including Brexit, will remain.”
OPEC cut its non-OPEC supply estimate for 2019 by 160,000 barrels a day to 1.82 million barrels, based on declining U.S., U.K. and Norwegian production. U.S. production was cut by 70,000 barrels a day in September to 1.8 million barrels, and this month OPEC lowered that estimate by another 130,000 barrels in its report.
The cartel’s projection for 2020 non-OPEC supply growth was revised downward by 50,000 barrels to 220,000 barrels a day, down by 140,000 barrels compared with last month’s projection. Total non-OPEC supply for 2020 is now forecast at 66.46 million barrels a day, a decline of 190,000 barrels compared to 2019 supply growth.
2019 demand for OPEC crude is now forecast to rise by 100,000 barrels a day to 30.7 million barrels. Projected demand for OPEC crude in 2020 rose to 29.2 million barrels a day, an increase of 200,000 barrels from September and about 1.2 million barrels below the forecast demand for this year.
Brent crude traded up about 0.7% Thursday morning at $58.74, and WTI traded up about 0.8% at $53.01. Both remain well short of three-month highs, however.