The International Energy Agency broadcasts supply will exceed demand in the world oil market in 2020, APA-Economics reports citing Agency’s monthly statement.
Our balances show the potential for oversupply next year, with a 2.1 mb/d expansion of non-OPEC supply, led by the US, versus 2 mb/d in 2019. That will lower the requirement for OPEC crude, with the call on OPEC plunging to 28 mb/d in 1Q20. OPEC has not produced at such a low level since 3Q03.
In the meantime, the widely-anticipated decision by OPEC+ ministers to extend their output agreement to March 2020 provides guidance but it does not change the fundamental outlook of an oversupplied market.
On our balances, assuming constant OPEC output at the current level of around 30 mb/d, by the end of 1Q20 stocks could increase by a net 136 mb. The call on OPEC crude in early 2020 could fall to only 28 mb/d.