The global oil market could move into deficit sooner than expected, thanks to OPEC’s output agreement with Russia and others and to Canada’s decision to cut supply, the International Energy Agency said on Dec. 13.
The Paris-based IEA kept its 2019 forecast for global oil demand growth at 1.4 million barrels per day (MMbbl/d), unchanged from its projection last month, and said it expected growth of 1.3 MMbbl/d this year.
Uncertainty over the global economy stemming from U.S.-China trade tensions could undermine oil consumption next year, as growth in supply gathers pace.
“For 2019, our demand growth outlook remains at 1.4 MMbbl/d even though oil prices have fallen back considerably since the early October peak,” the IEA said.
“Some of the support provided by lower prices will be offset by weaker economic growth globally, and particularly in some emerging economies.”
The Organization of the Petroleum Exporting Countries agreed last week with Russia, Oman and other producers to cut oil output by 1.2 MMbbl/d from January to stem a build-up in unused inventories of fuel.
The decision by the government of Canada’s Alberta province to force oil producers to curtail supply will bring the largest reduction to crude output next year, the IEA said.
The oil price has fallen by nearly a third so far this quarter to around $61/bbl, from a four-year peak close to $87/bbl in early October.