OPEC: Global Oil Demand, Mostly From China and India, Would Grow This Year

Light Phone reported on January 19thThe Organization of Petroleum Exporting Countries (OPEC) said on Wednesday that an improved global economic outlook would help accelerate oil demand growth in 2020, the US media reported.

According to the Wall Street Journal website on January 15th , in its closely watched monthly oil market report, OPEC raised its forecast for global oil demand growth by 140,000 barrels a day to 1.22 million barrels a day, and also raised its forecast for global economic growth in 2020 to 3.1 percent, the report said.

It was reported that OPEC's revised oil demand growth forecast mainly reflected an improved economic outlook for 2020, with most of the growth expected to come from developing countries, particularly China and India.

A month ago, OPEC and its allies just reached a new deal to cut production. They would cut the production of another 500,000 barrels a day until the end of March 2020, bringing the cartel's output to about 1.7 million barrels. By cutting the production, OPEC aimed at softening the impact of the global economic slowdown that had a knock-on effect on global oil demand last year. In this situation, OPEC lowered its estimation for global oil demand growth in 2019 five times in eight months.

However, those people who hoped for a more balanced oil supply and demand were likely to be disappointed, because OPEC would raise its forecast for non-OPEC supply growth in 2020 by 180,000 barrels to 2.35 million barrels, with the reason for the higher expected supply growth for Norway, Mexico and Guyana.   

In spite of cutting its forecast production for US supply growth, OPEC said other big non-OPEC producers such as the United States, Canada, Brazil, Norway and Guyana would still lead global supply growth this year.

It was reported that a further cut in output agreed by OPEC and its allies in December may not be able to curb the growing global oil glut. The price of Brent crude, which was the global benchmark, fell by 3% since January, and the price of U.S. crude futures fell by 5.3% after wild swings in the first week of January.