Global demand for oil has slowed, says latest OPEC estimate
Economic growth reduced to 3% for 2019 and 3.1% for 2020, down 0.1% in each year.
CALGARY — Global demand for crude oil appears to have weakened recently in many parts of the world, according to The Organization of Petroleum Exporting Countries.
OPEC’s monthly market report for September estimates that total world demand for crude will grow by 1.02% in 2019 over last year and 1.08% in 2020 compared with this year.
That’s down from earlier growth estimates of 1.11% and 1.14% issued Aug. 16.
“The drop can be attributed to weaker-than-expected data (in the first half of 2019) from various global demand centres and slower economic growth projections for the remainder of the year,” the report said.
OPEC’s estimate for global economic growth has been reduced to 3% for 2019 and 3.1% for 2020, down 0.1% in each year compared with the August estimate.
Among other things cited for the decline: slower economic growth in the US and the European companies that use the euro, below-estimate growth in India during the first half of 2019 and the US-China trade dispute.
In Canada – a non-OPEC oil exporter – the report says demand is expected to be up slightly in 2020 compared with 2019, which began with five months of stagnant growth followed by solid growth in June.
It also says demand for crude in the United States, a major market for Canada, is expected to grow 1.0 per cent in 2019, but that’s down from the prior estimate of 1.05%. Projected 2020 US demand growth is 0.7%.
Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers, said in an interview that their problem hasn’t been lack of demand but Canada’s inability to deliver oil and gas due to insufficient pipeline capacity.
“It’s a self-created problem and we need to get new pipe in the ground (to go) south, west and east,” McMillan said in a phone interview. “I hope it’s an election issue in every part of Canada.”
But outside the United States, the OPEC report says, demand in Europe’s advanced economies is projected to fall by 0.15% in 2019 compared with last year and by 0.21% in 2020.
Demand in the Asia-Pacific region’s OECD economies is projected to fall by 1.02% and 0.99% in 2019 and 2020, respectively.
In China, a non-OECD country, demand for oil is expect to grow this year by 2.73%t over 2018 and by 2.45% in 2020.