Oil Supply Exceeds Demand in 1H
Oil supply exceeded demand by 0.9 million barrels per day (MMbpd) in the first half of 2019, according to the International Energy Agency’s (IEA) latest oil market report.
In a statement posted on the organization’s website on Friday, the IEA said its latest data shows a global surplus of 0.5MMbpd in the second quarter (2Q). Previous expectations for 2Q were of a 0.5MMbpd deficit, the IEA highlighted.
“This surplus adds to the huge stock builds seen in the second half of 2018 when oil production surged just as demand growth started to falter,” the IEA said in the statement.
“Clearly, market tightness is not an issue for the time being and any re-balancing seems to have moved further into the future,” the IEA added.
The IEA’s forecast for oil demand growth in 2019 remains at 1.2MMbpd. Last month, the IEA cut its 2019 oil demand growth forecast from 1.3MMbpd to 1.2MMbpd. That was the IEA’s second consecutive oil demand growth forecast cut, following a decrease from 1.4MMbpd to 1.3MMbpd in May.
Looking ahead, the IEA outlined in the latest statement posted on its website that oil demand growth could rebound to 1.4MMbpd in 2020.
Earlier this week, the U.S. Energy Information Administration (EIA) lowered its 2019 oil demand growth forecast to 1.1MMbpd in its latest short-term energy outlook (STEO). This latest projection marks a 0.2MMbpd drop compared to its previous oil demand growth forecast in June. In 2020, the EIA expects oil demand growth to rise to 1.4MMbpd, according to its STEO released in July.
According to McKinsey Energy Insights’ Global Energy Perspective 2019 Reference Case, which was launched in February, oil demand growth is expected to slow significantly from next year. Back in January, Rystad Energy’s long term-outlook revealed that oil demand will grow steadily in the 2020s and peak in the late 2030s.
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