VIENNA, AUSTRIA – 2018/06/20: OPEC logo is seen at the Organisation of Petroleum Exporting Countries (OPEC) building in Vienna.
The 174th OPEC meeting will be held on the 22th June 2018 in Vienna. (Photo by Omar Marques/SOPA Images/LightRocket via Getty Images)
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OPEC downwardly revised its forecast for oil demand growth for the second consecutive month on Wednesday, building the case for another round of production cuts from the Middle East-dominated group of producers.
In a closely-watched monthly report, OPEC cut its forecast for global oil demand growth for the remainder of this year to 1.02 million barrels per day (b/d). That’s down 80,000 b/d from its August estimate.
The group, which consists of some of the world’s most powerful oil-producing nations, attributed the downgrade to weaker-than-expected economic data in the first-half of the year and deteriorating growth projections for the remainder of 2019.
In 2020, OPEC said it sees world oil demand increasing by 1.08 million b/d. This represents a downward adjustment of 60,000 b/d from the previous month’s assessment, “mainly to accommodate changes to the world economic outlook.”
The report comes as OPEC and allied non-OPEC partners, sometimes referred to as OPEC+, prepare to meet in Abu Dhabi on Thursday.
The meeting is likely to provide crucial clues about how far some of OPEC’s most powerful players are willing to go to get prices on a firmer footing.
The full coalition will gather again in Vienna at the end of the year to decide whether any further action is required for 2020.
OPEC+ is expected to reaffirm its commitment to rebalancing the market at its September 12 meeting, with OPEC kingpin Saudi Arabia poised to double down on its “whatever it takes” message.
Alongside Russia and other allied producers, OPEC agreed to reduce output by 1.2 million barrels a day at the beginning of 2019. That deal replaced a previous round of production cuts that began in January 2017.