In a monthly report, OPEC said its oil output fell by nearly 800,000 barrels a day in January, to stand at 30.81 million barrels a day. It's still a little more than OPEC's demand for its average crude oil in 2019.
Worried about lower oil prices and rising supply, the Organization of Petroleum Exporting Countries and its allies, including Russia, agreed in December to cut back on their supplies. As part of this agreement, OPEC is cutting production by 800,000 barrels per day from 1 January.
In the report, OPEC lowered its global economic growth forecast for 2019 by 0.2 percentage point, to 3.3%, and highlighted a series of hurdles such as a slowdown in world trade.
"Some recent positive developments could support the world economy at its current level, including the recovery of oil prices, the possible progress of US-China trade negotiations, and the less ambitious monetary tightening of the US Federal Reserve," he said. indicated the OPEC in its report.
"Nevertheless, this would not allow the global economy to exceed growth expectations."
Oil rose Tuesday to over $ 63 a barrel. Crude rose from less than $ 50 in December, supported by OPEC-led cuts and unwinds led by Saudi Arabia, despite fears of slowing demand.
The reduction in supply was a political reversal after the alliance of producers known as OPEC + agreed in June 2018 to strengthen supply while the US president United, Donald Trump, urged to lower prices and cover the expected deficit of Iranian exports.
OPEC changed course after prices fell by $ 86 per barrel in October, warning producers of a new glut. A reduction of OPEC + from January 2017 had eliminated a previous surplus.
The OPEC report indicates that oil inventories in developed economies were above the five-year average in December, a sign of oversupply.
The biggest drop in OPEC supply last month came from Saudi Arabia and stood at 350,000 b / d, the report revealed.
With the supply cut delivered in January, the eleven OPEC members expected to do so under the deal achieved a compliance rate of 86%, according to a Reuters calculation – a high rate against the norms of the OPEC.
This could increase in the coming months, with Saudi Arabia voluntarily reducing the supply of more than expected.
Saudi Arabia expects to pump around 9.8 million bpd in March, more than 500,000 bpd below the target set in the agreement, announced its minister. Energy at the Financial Times.
And further declines in Iran, Libya and Venezuela – exempted from the supply pact – could lead to a tailwind.
OPEC indicated in its report that demand for its crude oil in 2019 would fall to 30.59 million bpd, down 240,000 bpd from the latest report, while competitors such as the United States United stimulate production and the slowdown in the economy limits demand.
This means that the world market would record a slight surplus of around 200,000 b / d in 2019 if OPEC continued to pump at the January rate, although, all other things being equal, the Saudi plan aimed at to further reduce supply offsets this decline.
According to OPEC forecasts, world demand for oil is expected to increase by 1.24 million bpd in 2019, 50,000 bpd lower than last month. Non-OPEC producers will increase production by 2.18 million barrels a day, 80,000 more than previously expected.
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