Global demand for oil appears to have slowed, according to latest OPEC estimate
OPEC’s monthly market report for September estimates that total world demand for crude will grow by 1.02 per cent in 2019 over last year and 1.08 per cent in 2020 compared with this year.
That’s down from earlier growth estimates of 1.11 per cent and 1.14 per cent 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 3.0 per cent for 2019 and 3.1 per cent 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 United States and the European companies that use the euro, below-estimate growth in India during the first half of 2019 and the U.S.-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 per cent. Projected 2020 U.S. demand growth is 0.70 per cent.
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 per cent in 2019 compared with last year and by 0.21 per cent in 2020.
Demand in the Asia-Pacific region’s OECD economies is projected to fall by 1.02 per cent and 0.99 per cent in 2019 and 2020, respectively.
In China, a non-OECD country, demand for oil is expect to grow this year by 2.73 per cent over 2018 and by 2.37 per cent next year, down from earlier estimates of 2.77 per cent in 2019 and 2.45 per cent in 2020.