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Increased concerns about sluggish demand in the oil industry

2019-09-12T04:37:34.675Z


[Singapore 11th Reuters]-At the oil industry conferences held this week in Singapore and Abu Dhabi, many voices pointed out the sluggish demand in China and India. The view that crude oil prices will be sluggish over the next year is getting stronger


[Singapore 11th Reuters]-At the oil industry conferences held this week in Singapore and Abu Dhabi, many voices pointed out the sluggish demand in China and India. The view that crude oil prices will be sluggish over the next year is growing.

In particular, there are concerns about a decrease in automobile sales in China and India and a reduction in activities in the Chinese manufacturing industry.

North Sea Brent Crude Oil Futures <LCOc1> has fallen by about $ 10 since April and traded at around $ 63 per barrel.

The US Energy Information Agency (EIA) forecasted an average price of North Sea Brent for the fourth quarter of $ 60 on the 10th.

At the Asia-Pacific Petroleum Conference held in Singapore this week, Ben Lecock, co-head of the oil division of oil trading company Trafigula [TRAFGF.UL] said, “This year is flat and the outlook is bearish towards the end of the year. "Said.

At the World Energy Conference in Abu Dhabi, the bearish outlook was prominent.

Russia's Novak Energy Minister said that the OPEC plus, which is composed of major oil-producing countries such as Russia, will discuss the slowing demand at a meeting held on the 12th.

According to the minister, no proposal has been made to adjust production quotas under the current reduction of 1.2 million barrels per day, but there is a possibility of discussing new metrics to monitor the performance of the agreement. That's it.

OPEC announced on the 11th of the month that the global crude oil demand growth forecast for next year is set at 1.08 million barrels a day, which has been revised downward by 60,000 barrels from the previous forecast.

China's August producer price index (PPI) recorded the biggest decline in the past three years. It was highlighted that the manufacturing industry was hit by the US-China trade war.

Reynolder CEO CEO of Austrian energy company OMV <OMVV.VI> said, “If you look at the consumer market, our industry needs to prepare for a slowdown. "Said.

Energy consulting firm Wood Mackenzie expects this year's global demand for liquid energy to grow to 700,000 barrels a day. The forecast was revised downward from 850,000 to 900,000 barrels, which was previously expected. The reason is that the US-China trade war has had an adverse effect on the economy.

The EIA has also revised its global demand growth down from 1 million barrels a day to 890,000 barrels a day.

Oil and gas research firm JBC Energy has also predicted that global oil demand growth this year will fall below 1 million barrels per day.

“There is no strong growth engine in the market. Major countries are under pressure from geopolitical uncertainties such as trade wars and the UK's withdrawal from the European Union.” EBC・ Developing countries are also forced to deal with this problem and relative high prices. ”

“We are tracking indicators such as federal funds (FF) interest rates, government bond yields, commodity indexes, purchasing managers' index (PMI), but all indicators support our concerns about demand.” It was.

ANZ economists also revised their forecast for oil demand growth this year from 1.2 million to 1 million barrels per day. He cited the sluggishness of PMI and the decline in automobile sales worldwide.

However, JBC and Wood Mackenzie expect demand to recover gradually next year.

“We expect to return to around 1.2 million barrels a day next year because of the marine fuel regulations of the International Maritime Organization (IMO) and the base effect due to the slow growth in demand last year and this year. "Said.

Wood Mackenzie expects next year's demand growth to be 1.3 million barrels per day.

Source: asahi

All news articles on 2019-09-12

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