The US investment bank Goldman Sachs forecasts a 2019 crude oil demand of 1.275 million barrels per day, compared to an initial forecast of 1.45 million barrels per day.
Goldman Sachs lowered its forecast for global oil demand growth for 2019 on Sunday. This downward revision was based on disappointing global economic activity, mostly affected by less favorable weather conditions for energy consumption as well as low demand for fuels.
As a result, the investment bank revised its 2019 crude oil demand forecast to 1.275 million barrels per day from an initial forecast of 1.45 million barrels per day at the beginning of the year. The bank, however, said the level was still above the average forecast of about 1.05 million barrel per day experienced this year. Goldman Sachs added that “with a tendency towards stabilization of all other factors, we estimate that an upward adjustment of the forecast of 1.275 million barrels per day of will result in an increase of 6 dollars per barrel of Brent“.
Regarding oil demand for 2020, US bank analysts estimate that it should reach 1.45 million barrels a day thanks to a gradual acceleration of global economic growth and increased demand due to the new rules of the International Maritime Organization (IMO) on fuels scheduled to come into effect from 2020. In its July monthly report, OPEC noted, it should be recalled, that “despite some uncertainty, world oil demand should reach 1.14 million barrels per day in 2019 and 2020“.
For its part, the International Energy Agency (IEA) said in its latest monthly report that its latest forecasts “show a global surplus in the second quarter of 2019 of 0.5 million barrels per day, against a previously forecast deficit of 0.5 million“. A situation that could extend into the second half of the year with a possible impact on prices. In its forecast, the IEA predicted world oil inventories would rise by 0.1 million barrels per day in 2019 and 2020. In addition, it should be noted that US production is experiencing strong growth thanks to the boom of oil shale, as in other regions of North America.
This growth in US supply is not expected to run out of steam next year. For several months, oil prices have been suffering from record US production amidst fears of slowing global growth, and thus the global demand for black gold. This rise in world oil stocks reflects, in large part, the downward outlook for global oil demand in 2019. It is keeping the market from rebalancing. The decision by OPEC and its allies to extend their production reduction agreement by nine months to support prices does not seem to change the prospect of a surplus market for the time being.