More pressure on the global oil market with the US Energy Information Administration trimming its 2019 forecast for global demand for oil by 200,000 barrels a day.
It’s the sixth consecutive month that the EIA has lowered that forecast.
The flow of weaker data from China in recent weeks suggests that global demand is slowing, although the monthly trade data still shows a high level of imports into the country. The June and first half data are due for release tomorrow (Friday).
The EIA said the trim “reflects lower-than-expected oil consumption so far this year, in addition to slowing economic growth in many of the world’s largest oil-consuming countries”,
In its July market report, it also pointed to “Warmer-than-normal weather in OECD countries and slowing economic growth contributed to lower demand.” Australia can attest to that warmer weather this winter – it is also the US and parts of Europe are experiencing.
The EIA is now forecasting global demand this year will be 101 million barrels a day, up 1.1 million b/d. The EIA left unchanged its 2020 forecast rise of 1.4 million bpd.
The forecast was updated after OPEC and its allies (mainly Russia) maintained the production cap of 1.2 million barrels a day until March 2020.
In May the International Energy Agency cut its oil demand growth estimate for 2019 by 90,000 bpd to 1.3 million bpd.
The EIA said in its July report that it says US crude oil production averaged 11.0 million b/d in 2018, up 1.6 million b/d from 2017. That was a record high for total production and year-over-year growth.
The EIA forecasts US crude oil production will average 12.4 million b/d in 2019 and 13.3 million b/d in next year, with most of the growth coming from the Permian region of Texas and New Mexico.
Production the week before last was around 12.2 million barrels a day, so output is expected to edge up by 200,000 barrels a day between now and the end of the year.
Seeing output has fallen back from 12.3 million barrels a day in May to 12.2 million, a further jump this year looks increasingly harder to achieve.
Interestingly the EIA forecasts that America’s crude oil and petroleum product net imports will average 600,000 b/d this year, down from an average of 2.3 million b/d in 2018.
EIA forecasts the United States will be a net exporter of crude oil and petroleum products at a rate of 100,000 b/d by the fourth quarter of this year and by an average of 500,000 b/d in 2020.