Despite fears of disruptions to global oil supplies and curbs on production, major oil producing group OPEC sees global oil supplies as fine – it's demand that should be worrying people.
The 15-member OPEC said Wednesday in its latest monthly report that preliminary data suggested that the global oil supply increased 490,000 barrels a day to average 98.9 mb/d in August, compared with the previous month.
In 2018, OPEC believes the non-OPEC oil supply in 2018 will grow by 2.02 million barrels a day (mb/d) despite making a downward revision of 64,000 b/d from its last report. In 2019, non-OPEC oil supply is expected to grow by 2.15 mb/d, a minor upward revision of 17,000 b/d.
Meanwhile, OPEC's supply is also rising.
According to secondary sources (that is, not the producers themselves) total crude oil production by OPEC members averaged 32.56 mb/d in August, an increase of 278,000 b/d over the previous month.
Crude oil output increased mostly in Libya, Iraq and Nigeria, while production declined in Iran, Venezuela and Algeria. Iran is due to be hit with sanctions on its oil industry from November onwards while Venezuela is experiencing economic and political upheavals, affecting production.
Oil production by OPEC's defacto leader Saudi Arabia has ticked up since May, when it and Russia signalled that they could increase output to fill any supply shortages due to incoming U.S. sanctions on Iran's oil industry.
The latest data from OPEC, collected both by direct communication with producers and from secondary sources, shows a contrasting picture of production in Iran.
According to secondary sources, Iran's oil supply production fell by 150,000 barrels a day from July to August to around 3.5 mb/d.
But Iran has reported stable and unchanged production figures for the last three months, however, of 3.8 mb/d.
In 2018, world oil demand is expected to grow by 1.62 million barrels a day, a minor downward revision from last month's projection.
"World oil demand growth in 2018 was revised downward by around 20,000 b/d, primarily as a result of the slower-than-expected performance by non-OECD Latin America and the Middle East during the second quarter of 2018" OPEC said in its latest report published Wednesday.
"Hence, world oil demand growth is now pegged at 1.62 mb/d for 2018, with total global consumption at 98.82 mb/d," it said.
OPEC revised world oil demand growth lower for 2019 as well.
"In 2019, world oil demand growth was revised slightly lower by 20,000 from the previous month's report, primarily as a result of economic revisions to Latin America and the Middle East. World oil demand growth is now anticipated at 1.41 mb/d and total global consumption at around 100.23 mb/d."
What has started to trouble oil market watchers relates to the demand picture, with fears that punitive U.S. tariffs on Chinese imports could weaken demand the country's demand for oil.
Looking at the global oil trade, OPEC noted that while China's crude oil imports dropped in July by 70,000 barrels a day from the previous month to average 8.62 mb/d, based on an annual comparison, China's crude imports were still higher by 420,000 b/d in August, or 5 percent higher from a year ago.
Demand for oil from the 15-member producing group OPEC is expected to fall the rest of 2018 and into 2019, OPEC said. In 2018, demand for OPEC crude is expected at 32.9 million barrels a day (mb/d), which is 500,000 barrels a day lower than in the previous year, the organization said.
OPEC forecasts that demand for its crude at 32.1 mb/d in 2019, around 900,000 b/d lower than a year earlier. Yet, total world oil demand in 2019 is now projected to surpass 100 mb/d for the first time and reach 100.23 mb/d.
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