OPEC’s task of balancing the market a disconcerting one due to the oil market tightening up but a major surplus is coming in the next year.
“Trade disputes and rising uncertainty about the impact of the UK’s exit from the European Union are reducing global growth through lower business and consumer confidence, supply chain reassessments, declining investment and direct reduction of trade,” the IEA said. Brent prices should average about $62 per barrel for 2019.
The conclusion came from the International Energy Agency’s (IEA) latest Oil Market Report, which contained some optimistic conclusions regarding the health of the global economy, but also some warnings about the trouble ahead.
Furthermore, the IEA stuck with its demand forecast at 1.1 million barrels per day (mb/d), which is looking overly optimistic given a range of downward revisions from analysts elsewhere. The U.S. EIA now says demand may only grow by 0.9 mb/d, the slowest rate in nearly a decade.