Oil demand growth in 2019 will be lower than originally expected, the Organization of the Petroleum Exporting Countries and Russia stated in its monthly report.
Global oil demand growth for 2019 was lowered by 20,000 barrels per day (bpd) to 1.4 million bpd while non-OPEC oil supply in 2019 was revised up by 30,000 bpd to 2.13 million bpd.
Meanwhile global oil production in July rose by 680,000 bpd, while total production of OPEC countries rose by 41,000 bpd to 32.32 million bpd despite recent cuts in supply from Saudi Arabia. The boost in production was due to increase in production from Kuwait, Nigeria and the UAE. Saudi Arabia production fell by 200,000 bpd to 10.288 million bpd.
OPEC agreed in June to raise output at a nominal increase of 1 million barrels a day (bpd) amid pressure from the U.S. to decrease prices. While OPEC members are expected to add around 700,000 barrels a day, non-OPEC oil suppliers led by Russia would add the rest.
Further tightness in the diesel market could continue, due to a lack of investments in fuel oil desulfurization units, putting pressure on diesel prices.
“Looking ahead, healthy global economic developments and increased industrial activity should support the demand for distillate fuels in the coming months, leading to a further drawdown in diesel inventories, which already stand well below the five-year average in the OECD region,” the report stated.
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