OPEC monthly oil market report for August 2018 is out and here are the most important highlights:
1- Oil demand growth for 2018 and 2019 was revised down by 20 tb/d to 1.64 mb/d and 1.43 mb/d respectively which are lower than the previous month. Based on these revisions, 2018 and 2019 oil demand growth are anticipated to be at 98.83 mb/d and 100.26 mb/d respectively.
Takeaway: Negative impact to oil prices.
2- As always, OPEC revised its Non-OPEC oil supply forecasts for 2018 and 2019 by 73 tb/d and 106 tb/d respectively. Based on the revisions, non-OPEC supply growth for 2018 and 2019 will average at 59.62 mb/d and 61.75 mb/d respectively. The main driver for such revision is the output growth from the US, Brazil, Canada, the UK, Kazakhstan, Australia and Malaysia.
Takeaway: Negative impact to oil prices.
3- OPEC oil output increased by 41 tb/d. Output growth from Iraq and Nigeria was offset by 200 tb/d decline of oil output from Saudi Arabia.
Takeaway: Positive impact to oil prices. The fact that Saudi Arabia’s oil production declined last month despite comments by the biggest OPEC oil producer to increase oil output in order to prevent any price hike expected from the disappearance of some of Iran oil output due to U.S. sanctions will provide some support to oil prices.
OPEC Crude Oil Production Data, Source: OPEC Monthly Oil Market Report, August 2018
