While the outlook for oil market seems somewhat bearish for the rest of the year, it remains critical to monitor the supply-demand balance and assist market stability in the months ahead, the Organization of the Petroleum Exporting Countries (OPEC) said in its monthly report.
The OPEC, which produces about a third of the world’s oil, anticipated that oil demand for 2019 and 2020 would grow by 1.10 million barrels per day (bpd) and 1.14 million bpd respectively year-on-year, agency reports.
This forecast is subject to downside risks stemming from uncertainties with regard to global economic development, including softening growth and escalating geopolitical tensions, said OPEC. OPEC and its allies agreed here in early July to extend production cuts by nine months until the end of March 2020, in order to avoid build-up of inventories and prop up oil prices.
The energy alliance between OPEC and the so-called OPEC+ partners, including Russia, has been reducing oil output since 2017 in order to prevent prices from dropping sharply amid soaring production in the U.S., which has surpassed Russia and Saudi Arabia to become the world’s top producer.