OPEC continued to reduce its forecast for oil demand in its latest monthly report, issuing its fourth consecutive downward revision to consumption growth for 2019.
The 15-member oil cartel forecasts the world's appetite for crude will grow by 1.29 million barrels per day in 2019, down 70,000 bpd from its projection last month. The group has revised its outlook lower every month since July, when it initially forecast growth of 1.45 million bpd for next year.
Meanwhile, the cartel now sees output from non-member nations increasing by 2.23 million bpd next year, up 120,000 bpd from its last forecast.
"Although the oil market has reached a balance now, the forecasts for 2019 for non-OPEC supply growth indicate higher volumes outpacing the expansion in world oil demand, leading to widening excess supply in the market," OPEC said. "The recent downward revision to the global economic growth forecast and associated uncertainties confirms the emerging pressure on oil demand observed in recent months."
The warning adds further evidence that OPEC and a group of allied oil exporters could launch a fresh round of supply cuts when they meet in a few weeks.
OPEC, along with Russia and several other nations, began cutting output in January 2017 to drain global crude stockpiles and end a punishing oil price downturn. The alliance agreed in June to restore some of that production after the group took more barrels off the market than they intended.
With oil prices plunging into a bear market in recent weeks, the group is now considering reversing course. On Monday, Saudi Energy Minister Khalid al Falih said the group may need to cut nearly 1 million bpd from October levels.
OPEC's total output increased by 127,000 bpd in October to 32.9 million bpd, according to independent sources cited by the group in its monthly report.
Saudi Arabia raised its output by 127,000 bpd to 10.6 million bpd in October, according to both independent figures and data provided by the kingdom. That is notable because Falih said last month the kingdom would pump 10.7 million bpd, near a November 2016 record right before the production agreement started.
The Trump administration has largely relied on the Saudis to pump more oil to offset the impact of its sanctions on Iran, OPEC's third biggest producer. The sanctions have cut Iran's oil exports by roughly 1 million bpd.
On Monday, President Donald Trump said in a tweet that he hopes OPEC and Saudi Arabia do not cut supplies, saying oil prices should be much lower based on supply.
Iran's output fell by more than 150,000 bpd for the second month in a row, and now sits at 3.3 million bpd, according to the independent sources. Iran did not provide its own figures this month.
Only the United Arab Emirates chipped in a bigger increase than the Saudis in October, lifting output by 142,000 bpd. Libya, Angola, and Qatar also contributed to the increase.
Venezuela's production continued its terminal decline amid the country's ongoing economic free-fall, dropping by 40,000 bpd to below 1.2 million bpd.
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