OPEC on Wednesday forecast world demand for its crude will decline next year as growth in consumption slows and rivals pump more, pointing to the return of an oil market surplus despite an OPEC-led pact to restrain supplies.
Giving its first 2019 forecasts in a monthly report, the Organization of the Petroleum Exporting Countries said the world would need 32.18 million barrels per day (bpd) of crude from its 15 members next year, down 760,000 bpd from this year.
The drop in demand for OPEC crude means there will be less strain on producers such as Saudi Arabia in making up for supply losses such as falling Venezuelan and Libyan output, and an imminent drop in Iranian exports as U.S. sanctions return.
“Following the robust growth seen this year, oil market developments are expected to slightly moderate in 2019, with the world economy and global oil demand forecasts to grow slightly less,” OPEC said in the report.
Oil topped $80 a barrel this year for the first time since 2014, boosted by OPEC-led output cuts and involuntary supply losses. U.S. President Donald Trump has been urging Saudi Arabia and OPEC to raise output to cool prices.
OPEC and a group of non-OPEC countries agreed on June 22-23 to return to 100 percent compliance with oil output cuts that began in January 2017, after months of underproduction by Venezuela and others pushed adherence above 160 percent.
The strong pace of oil demand that helped OPEC balance the market is expected to wane next year. OPEC expects world oil demand to grow by 1.45 million bpd, down from 1.65 million bpd in 2018, and said any upside could be accommodated.