OPEC lowers demand expectations for economic slowdown

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The crude oil consumption in 2019 and 2020 be smaller than the one calculated so far by OPEC, due to a generalized, although slight, slowdown in economic growth caused by several factors, since the trade war between China and the US, to the uncertainties of "brexit" and the problems in Germany.

In its new estimate of demand, published today, the Organization of Petroleum Exporting Passes (OPEC) predicts that the world will burn in 2019 an average of 99.84 million barrels of crude oil per day (mbd), 1% more than last year, but below what was calculated last month.

In its September report on the oil market, the OPEC justifies that reduction, of 80,000 barrels per day, or 0.08%, in which the consumption data of the first half of the year have been "weaker than expected" and some "slower economic growth projections for what remains of ao ".

Similarly, the energy group sets its demand expectation for the year that comes at 100.92 MBD, 0.06% less than anticipated last month, due to the need to take into account changes in the economic outlook for 2020 .

In that sense, OPEC estimates that the world economy will grow 3% in 2019 and 3.1% the following year, 0.1 points respectively less than expected.

In explaining that slowdown in 2019, the OPEC refers to a "combination of numerous trends".

Among them he cites a slowdown in the US, especially in the manufacturing sector; the uncertainties related to "brexit" and how they will affect the eurozone; at the lowest expected growth in India; to the problems in Argentina, and to the "continuation of the US-China trade dispute."

OPEC's monthly analysis indicates that "as some trends are expected to continue in 2020", the US economic growth for that year is revised downwards, from 2 to 1.9%; and that of the Eurozone of 1.2 to 1.1% "given the growing uncertainties in key economies", such as Germany and Italy.

But, beyond the more industrialized economies, OPEC expects lower than expected economic growth also in China, India, Brazil or Russia by 2020.

However, OPEC insists that economic growth can be greater, if, for example, an agreement is finally reached for "brexit" or some geopolitical tensions are eased.

Despite the downward revision in the growth of crude oil consumption, OPEC is still waiting for the barrier of 100 million barrels per day to be exceeded in 2020, essentially pushing for the increase in demand in China and India.

The most industrialized countries in Europe, on the other hand, will consume 0.21% less than this year, while in the United States and Latin America, increases in consumption of 0.69 and 1.14%, respectively, are expected.

In relation to the offer, the OPEC indicates that its production rose last August, according to secondary sources, until 29.7 MBD, despite the strong each in Venezuela, which fell 5.7%, and Irn, which fell 1%.

Venezuela experienced the most significant drop in crude oil pumping among the fourteen members that make up OPEC.

Regarding the offer for next year, OPEC expects its competitors to put into circulation 66.65 MBD, 3% less than expected so far, due to a smaller increase in production in the United States, the largest extractor in the United States. world.

Regarding its own crude, OPEC expects to place 29.4 MBD in the market by 2020, 1% below its current combined pumping.

OPEC also assures in its report that the strategy of reducing production by 1.2 MBD until March 2020, agreed by its fourteen partners and several other producers, such as Russia, has helped stabilize the crude oil market.



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