Opec forecasts fall in demand days after cutting output by 1.2m barrels

Opec yesterday slashed oil demand projections, saying that the global appetite for its oil would fall to 31.44m barrels per day next year, 100,000 less than previous estimates.

The oil producers cartel last week cut output in response to a glut in global supply which had forced prices down.

However, the organisation said yesterday it expects supply from non-Opec countries to rise next year by 2.5m barrels per day to around 60m, more than offsetting it and its allies’ 1.2m cut.

The cartel’s monthly report foresees a global slowdown in oil demand, hitting the most vital export of many members.

“Rising trade tensions, monetary tightening and geopolitical challenges are among the issues that skew economic risks even further to the downside in 2019,” Opec said. “The upside appears limited.”

Meanwhile, its output only fell by 11,000 barrels per day, despite Donald Trump’s sanctions on Iran biting a 380,000 barrel hole in Opec’s exports. The drop was offset as its de facto leader Saudi Arabia pumped out a record 11.1m barrels per day.

The price of Brent Crude, the international standard, has dropped from around $85 per barrel in October. It was trading up around 1.3 per cent yesterday to $61.02.

Oil and gas consultancy Rystad Energy said that to get prices back up to around $70 Opec would have to slash production by a further 700,000 barrels per day, on top of the 1.2m announced last Friday.