OPEC expects lower demand for its crude oil in 2020 even as global demand rises, it said on Wednesday, as rival producers grab market share and the United States looks set for another output record.
The U.S., which has seen its output soar in recent years powered by shale, will see total liquids output exceed a 20 million barrels a day (b/d) milestone for the first time, the Organization of the Petroleum Exporting Countries forecast in its market report.
U.S. liquids output will reach 20.21 million b/d in the fourth quarter of 2020 – almost meeting U.S. demand of 21.34 million b/d, OPEC said.
It lowered its 2020 demand forecast for OPEC crude by 0.1 million b/d to 29.5 million b/d.
That would be around 1.2 million b/d lower than in the whole of 2019 and in line with December production, when OPEC’s share of global output fell 0.1 percentage point month on month to 29.4 per cent.
This year, it said OPEC’s market share is set to fall further as output booms in non-OPEC rivals including the U.S., Brazil, Canada, Australia, Norway and Guyana while global demand is rising.
OPEC said it had raised its overall 2020 oil demand growth outlook by 0.14 million b/d to 1.22 million b/d from the previous month, reflecting an improved economic outlook and booming demand in India and China. If that growth materializes it would be 30 per cent stronger than in 2019.
It raised its forecast for non-OPEC oil supply growth in 2020 by 0.18 million b/d to 2.35 million b/d, up from 1.86 million b/d in 2019.
“The continued accommodative monetary policies, coupled with an improvement in financial markets, could provide further support to ongoing increases in non-OPEC supply,” OPEC said.
OPEC and some non-OPEC allies such as Russia have been curbing production to prevent an oil glut and support oil prices above US$60 a barrel. Their current deal expires in March.
“The collaboration between OPEC and non-OPEC producing countries remains essential in maintaining stability in the oil market,” OPEC said.