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US briefly overtakes Saudis as top oil exporter, says IEA

Oil demand subdued on global economic uncertainty

LONDON: Global oil demand is weathering economic headwinds, the International Energy Agency (IEA) said yesterday, buoyed by lower prices brought on by abundant supply as the United States briefly dethroned Saudi Arabia as the world’s top exporter.


“With oil prices currently about 20 percent lower than a year ago, there will be support for consumers,” the IEA said in its monthly report. “Booming shale production has allowed the US to close in on, and briefly overtake, Saudi Arabia as the world’s top oil exporter … in June, after crude exports surged above 3 million barrels per day (bpd).”
The Paris-based agency maintained its estimate for growth in global oil demand during 2019 at 1.1 million bpd and 1.3 million bpd for next year, assuming no further breakdown in US-China trade talks and citing an easing of tensions around Iran.


Global oil demand growth is expected to remain subdued, with the economy weakening and buffeted by US-China trade tensions, IEA said. “International trade relations have further deteriorated in the past few weeks but US and Chinese officials announced that they would resume trade negotiations in early October,” the Paris-based IEA said in its latest monthly report.


“Trade disputes and rising uncertainty about the impact of the UK’s possible exit from the European Union are reducing global growth through lower business and consumer confidence, supply chain re-assessments, declining investment and direct reduction of trade,” added. Against this uncertain backdrop, the IEA left its oil demand growth forecasts for 2019 and 2020, lowered in its previous monthly report, unchanged at 1.1 million barrels per day and 1.3 mbd.


Demand growth in the first six months of this year came in at just 0.5 mbd and touched a low of 0.2 mbd in June, it noted. “For second half 2019, we assume no further deterioration in the economic climate and in trade disputes,” it said.


A rebound in US production following Hurricane Dorian along with steep output growth from Brazil and the North Sea were set to drive production from outside the Organization of the Petroleum Exporting Countries (OPEC) up sharply, it added. US crude exports spiked to more than 3 million bpd in June, as Saudi Arabia cut output sharply and Russia grappled with contamination in one of its main export pipelines.


Non-OPEC production growth is seen rising to 2.3 million bpd in 2020, up 400,000 from this year. Meanwhile, demand for OPEC crude is set to reach 28.3 million bpd in the first half of 2020, 1.4 million bpd less than the group produced in August. The discrepancy may prompt OPEC and its allies including Russia to revisit their production-curbing pact.
“The implied market balance (will be) returning to a significant surplus and placing pressure on prices,” the IEA said. “The challenge of market management remains a daunting one well into 2020.”


Russia, Iraq and Nigeria in August produced 600,000 bpd more than their quotas in the supply pact, the IEA said, but Saudi Arabia cut by more than it had pledged, keeping the overall agreement intact.
OPEC member Iran continued to suffer under US sanctions, with exports nearly halving month-on-month in August to just 200,000 bpd. A year earlier, they were at 2.1 million bpd. – Agencies

e of market management remains a daunting one well into 2020.”
Russia, Iraq and Nigeria in August produced 600,000 bpd more than their quotas in the supply pact, the IEA said, but Saudi Arabia cut by more than it had pledged, keeping the overall agreement intact.
OPEC member Iran continued to suffer under US sanctions, with exports nearly halving month-on-month in August to just 200,000 bpd. A year earlier, they were at 2.1 million bpd. – Agencies

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