OPEC said on Thursday it expected demand for its oil to fall in 2020 as rivals pumped more despite a smaller surplus of crude in the global market, building a case for the group to maintain supply curbs when it meets to discuss policy next month.
In its last monthly report before the Dec. 5-6 talks, OPEC said demand for its crude would average 29.58 million barrels per day (bpd) next year, 1.12 million bpd less than in 2019. That points to a 2020 surplus of about 70,000 bpd, which is less than indicated in previous reports.
The drop in demand could encourage the Organization of the Petroleum Exporting Countries and its allies to keep supply curbs in place when they gather in Vienna. But the report kept its 2020 economic and oil demand growth forecasts steady and was more upbeat about the outlook.
"On a positive note, signs of improving trade relations between the US and China, a potential agreement on Brexit after the UK's general election, fiscal stimulus in Japan, and a stabilization of the downward slope in major emerging economies could stabilize growth at the current forecast level," OPEC said in the report.
The report echoes comments from OPEC Secretary General Mohammad Barkindo, who has said the outlook in 2020 could surprise to the upside, citing prospects for a resolution of the US-Chinese trade row and lower non-OPEC supply.
OPEC, Russia and other producers have since Jan. 1 implemented a deal to cut output by 1.2 million bpd. In July, the alliance, known as OPEC+, renewed the pact until March 2020.
The organization in the report trimmed its 2020 forecast for growth in non-OPEC supply to 2.17 million bpd, 40,000 bpd less than the previous forecast.
OPEC's October output jumped by 943,000 bpd to 29.65 million bpd, according to figures the group collects from secondary sources, as Saudi Arabia's supply recovered from attacks in September.
The report suggested there would be a 2020 surplus of 70,000 bpd if OPEC kept pumping at October's rate and other factors remained equal, less than the 340,000 bpd surplus implied in September's report before the Saudi attacks.