Healthier global economic growth in 2020 is expected to lead to higher oil demand growth this year, OPEC said in its closely-watched Monthly Oil Market Report (MOMR) on Wednesday.
OPEC raised its 2020 economic growth forecast by 0.1 percentage point to 3.1 percent.
As a result of the improved economic outlook for this year, the cartel revised up its forecast for the 2020 global oil demand growth by 140,000 barrels per day (bpd) to 1.22 million bpd.
Oil demand growth in developed economies will be just 90,000 bpd this year, thanks to mature economies in America, but the bulk of global oil demand growth will come from developing Asian economies, particularly India and China, OPEC said. Oil demand growth in non-OECD countries will be 1.13 million bpd this year.
“The low interest rate environment is likely to support economic growth expected at 3.1% in 2020. Moreover, some additional support could possibly come from countries with ample fiscal space, taking the opportunity to borrow at very low rates – or sometimes negative rates – to finance infrastructure projects, which is expected to support the demand for oil,” OPEC said.
“The US, Brazil, Canada and Australia are the key drivers for growth in 2019, and continue to lead growth in 2020, with the addition of Norway and Guyana,” OPEC said.
Referring to OPEC’s production for December, the cartel’s secondary sources—the ones it considers legit—found that production fell by 161,000 bpd compared to November, to average 29.44 million bpd last month.
Saudi Arabia, Iraq, and the UAE—the top three OPEC producers—were the countries which reduced their production the most in December, with the Saudis cutting 111,000 bpd from November to 9.762 million bpd.
OPEC’s production figures confirm earlier surveys that the cartel not only continued to cut its crude oil production in December 2019, but it also managed to reach its deeper-cut target for Q1 2020 a month earlier than planned.