Yesterday, Opec lowered its projections for oil demand. It said that the global appetite for its oil would decline to approximately 31.44 million barrels per day in 2019. The amount is 100,000 less as compared to the previous estimates.
Last week, the oil producers cartel reduced its output as a response to a excess in global supply which had pushed the oil prices down.
However, yesterday, the organisation said that it is expecting that the supply from non-Opec nations will increase next year by approximately 2.5 million barrels per day to around 60 million, more than offsetting the 1.2 million cut of the cartel and its allies.
The monthly report of Opec predicts a global slowdown in the demand for oil, affecting the most vital export of many members.
Opec disclosed: “Rising trade tensions, monetary tightening and geopolitical challenges are among the issues that skew economic risks even further to the downside in 2019.”
It added: “The upside appears limited.”
Meanwhile, its output only dropped by 11,000 barrels per day, despite the sanctions that were imposed by Donald Trump, the President of the United of America on Iran creating a 380,000 barrel hole in the exports of Opec. The decline was offset as the Kingdom of Saudi Arabia, the de facto leader of the cartel, pumped out a record 11.1 million barrels per day.
The price of the international standard, Brent Crude, has fallen from approximately $85 per barrel last October. Yesterday, it was trading up around 1.3 percent to $61.02.
Rystad Energy, an oil and gas consultancy firm, said that the pec would have to reduce production by an additonal 700,000 barrels per day to get the prices back up to around $70. This comes on top of the 1.2 million that was announced last Friday.