Oil prices: IEA, OPEC weigh in with forecasts

Cornelia Mascio
Ottobre 13, 2018

And stored oil grew by about 500,000 barrels a day in the second quarter of 2018-a growth the IEA estimates has continued in the third quarter-suggesting that supply is still somewhat ahead of demand. "For many developing countries, higher worldwide prices coincide with currencies depreciating against the United States dollar, so the threat of economic damage is more acute", the IEA said.

On Friday, the IEA also downgraded oil demand growth forecast for 2018 and 2019 by 110,000 bpd for both years, to 1.3 million bpd this year and to 1.4 million bpd next year, respectively, on the back of a weaker economic outlook, trade concerns, higher oil prices, and a revision to Chinese data.

However, the drivers of demand remain very powerful, with petrochemicals being a major factor amid rising living standards, particularly in developing countries.

Schork Report editor Stephen Schork discusses whether crude oil prices will reach $100 a barrel by the end of the year. The cartel now sees global oil demand growth next year at 1.36 million bpd, down by around 50,000 bpd from last month's assessment, to reflect expectations for lower economic growth for Turkey, Brazil, and Argentina.

Since May, Opec output increased by 735,000 bpd, led by the main Gulf producers and supported by Nigeria and Libya, offsetting falls in Iran and Venezuela, the IEA said. "This strain could be with us for some time and it will likely be accompanied by higher prices, however much we regret them and their potential negative impact on the global economy".

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