OPEC cut its outlook for global oil demand for the medium-term and long-term citing a “challenging” 12 months for energy markets. The group said it forecast global oil demand of 104.8 million barrels per day by 2024 and 110.6 million barrels per day by 2040.
“Signs of stress have appeared in the global economy, and the outlook for global growth, at least in the short- and medium-term, has been revised down repeatedly over the past year,” OPEC said in its World Oil Outlook.
The group said it would likely cut production of crude and other products to 32.8 million barrels per day by 2024, down from 35 million barrels per day in 2019.
“We see a continuous surge, if you like, of non-OPEC supply, led by tight oil from the United States, and to some lesser degree, Canada, Brazil, Norway, Kazakhstan, and other non-OPEC countries,” OPEC Secretary-General Mohammad Barkindo said in an interview.
U.S. shale-oil output will climb more than 40% to reach 17 million barrels a day by 2025, or 3.1 million a day more than projected in OPEC’s report last year. American oil will account for a fifth of global daily output at that time.
“We have already started seeing a deceleration of growth in the United States. The shale patch in the U.S. is facing a tremendous amount of headwinds as a result of the unprecedented growth that we have seen in the last couple of years,” Barkindo said.
Brent crude futures have fallen nearly 30% since peaking at more than $86 in October 2018. West Texas Intermediate has fallen almost 20% since October 2018.
Neil Atkinson, head of the oil industry and markets division at the International Energy Agency, said he expects a big increase in supply from non-OPEC sources in the coming months.
“Meanwhile, growth in demand is slowing because of the poorer economic climate. So, we see a return to a major surplus at the beginning of next year,” Atkinson said.