Global oil markets have quickly recovered from attacks on Saudi oil facilities last month and even face oversupply next year as global demand slows, the International Energy Agency said on Friday.
Saudi Arabia, the world’s top oil exporter, has swiftly ramped up production since the greatest single outage to global supply in modern times, the IEA said.
“Oil markets in September withstood a textbook case of a large-scale supply disruption,” the Paris-based agency said in a monthly report, in a section headed “Business as usual.”
“Prices fell back as it became clear that the damage, although serious, would not cause long-lasting disruption to markets.”
The kingdom took just 11 days to restore lost output, though average supply there tanked by 770,000 barrels a day to slightly more than nine million b/d in September – the lowest level since 2011.
However, troubled economic prospects for 2020 prompted the IEA to reduce its forecast for oil demand growth by 100,000 b/d to a “still solid” 1.2 million b/d.
Rising supply growth from the United States, Brazil and Norway would reduce demand for OPEC crude to 29 million b/d next year, the IEA said, which could prompt the exporter group to keep restraining supply in 2020.
“The expected crude oil oversupply … could provide additional support for refining margins,” the report said.
The Organization of the Petroleum Exporting Countries, Russia and other producers, an alliance known as OPEC+, have since January implemented a deal to cut oil output by 1.2 million b/d to support the market.
The pact runs to March, 2020, and the producers meet to set policy on Dec. 5-6.
A deeper cut in oil supplies is among options for OPEC and its allies to consider at the gathering, OPEC Secretary-General Mohammad Barkindo said this week.