The International Energy Agency (IEA) said on Wednesday that world oil supplies will exceed demand in 2019, as a relentless rise in production will overshadow consumption growth, which faces a risk of slowing the economy.
In its monthly oil market report, the International Energy Agency (IEA) kept its forecast for world demand growth for 2018 and 2019 unchanged from last month at 1.3 million barrels per day and 1.4 million bpd, respectively, but lowered its growth forecast for non-OECD countries, It is the main driver of increasing world oil consumption.
For the first half of 2019, based on its forecasts for production outside OPEC and global demand and assuming the stability of the Organization's supply, the agency said that the inventory will increase by 2 million barrels per day.
Production has risen dramatically around the world since the middle of the year, while the escalation of the US-China trade dispute threatens global economic growth.
Three well-informed sources said on Wednesday that OPEC and its partners were discussing a proposal to cut oil production by up to 1.4 million barrels per day in 2019, to avoid a speculative offer that could weaken prices.
Since early October, oil prices have fallen by a quarter to less than $ 70 a barrel, their lowest level in eight months, which could somewhat protect demand.
"While the slowdown in economic growth in some countries slows the outlook for oil demand, a major downward revision of our price assessment is supportive," the agency said.
The agency has raised its non-OPEC oil production growth forecast to 2.4 million bpd this year and 1.9 million bpd next year, compared to its previous estimate of 2.2 million bpd and 1.8 million bpd, respectively.
The United States will lead production growth. The Energy Agency estimates total US oil supplies will rise by 2.1 million barrels per day this year and another 1.3 million bpd in 2019, from the current record high of more than 11 million bpd.
