Each OPEC and the IEA revised their oil demand forecasts downwards once more this week, Commerzbank commodity analyst Carsten Fritsch notes.
Oil market to face a major oversupply subsequent yr
“OPEC now expects a rise of 1.9 million barrels per day this yr and 1.7 million barrels per day subsequent yr. That’s 100,000 barrels per day lower than the earlier forecast in every case. However, OPEC stays way more optimistic than the IEA. This yr’s downward revision is because of China, for which OPEC expects demand to rise by 580,000 barrels per day, whereas the IEA expects solely 150,000 barrels per day.”
“The IEA additionally expects demand in China to develop solely barely extra subsequent yr, by 220,000 barrels per day. In gentle of the info revealed this week on Chinese language crude oil imports and processing, we contemplate the IEA’s decrease forecast to be extra real looking. In September, crude oil imports had been decrease than a yr in the past for the fifth consecutive month, whereas crude oil processing was decrease for the sixth consecutive month.”
“Based mostly on OPEC’s demand forecast, the oil market can be considerably below equipped this yr and subsequent, even when the voluntary manufacturing cuts by OPEC+ had been to be step by step withdrawn as deliberate from December. Against this, based mostly on the IEA forecasts, the oil market would face a major oversupply subsequent yr.”
