Non-OPEC crude oil supply will rise by 2.4 million bpd next year, OPEC said in its latest Monthly Oil Market Report.
The
cartel added that the rise would be driven by the addition of new
pipeline capacity in North America, most likely meaning the United
States as Canada’s pipeline woes continue and Mexico struggles to
reverse declining production. In fact, OPEC mentioned the natural
decline of production in Mexico would offset the effect of rising
non-OPEC supply somewhat.
It’s not just the U.S. that will expand production,
however. New projects in Norway, Brazil and Australia will also
contribute to the increase in non-OPEC supply.
However, OPEC has
revised downwards its non-OPEC supply growth projections for this year:
it sees growth at 2.05 million bpd, down by 95,000 bpd from its previous
monthly forecast. That would bring the total non-OPEC supply to a daily
average of 64.43 million bpd.
In demand, OPEC expects the 2020
increase to remain unchanged from this year, at 1.4 million bpd.
Non-OECD countries will account for most of this, at 1.05 million bpd
while OECD countries will contribute about 900,000 bpd to global demand
growth.
Somewhat surprisingly, China will not be
the largest driver of new oil demand. That, according to OPEC, will be
the rest of Asia, with China’s oil demand growing at a weaker pace than
during this year.
The growth in demand for OPEC oil specifically is seen
slowing down next year: OPEC has forecast that the total would average
29.3 million bpd in 2020, down by 1.3 million bpd from this year. The
daily rate of demand decline is 100,000 bpd more than the cuts OPEC
agreed to with its non-OPEC partners in December last year and suggests
the deal might have to be extended further than the end of March 2020,
which OPEC and its partners agreed on earlier this month.
By Irina Slav for Oilprice.com
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