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.Saudi and UAE desperate prop up oil prices. IEA delivers bad news to OPEC "2.3 mm bbls NON OPEC supply Growth 2020"

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From Reuters Article


DUBAI, UNITED ARAB EMIRATES - Saudi Arabia called for swift action to secure Gulf energy supplies ‘Rapid, decisive response’Saudi Energy Minister Khalid al-Falih said there must be “a rapid and decisive response to the threat” to energy supplies, market stability and consumer confidence, his ministry said on Twitter.Saudi Crown Prince Mohammed bin Salman, in an interview with Saudi-owned newspaper Asharq Al-Awsat, blamed Iran and called on the international community to take a “decisive stand” against the attacks.



"Surging U.S. supply as well as gains from Brazil, Canada and Norway would contribute to an increase in non-OPEC supply of 1.9 million bpd this year and 2.3 million bpd in 2020. "

  • Our estimate for global oil demand growth in 2019 has been cut for a second consecutive month. It is now projected at 1.2 mb/d. In 1Q19, global growth was only 0.3 mb/d, and for 2Q19 the estimate is 1.2 mb/d. We expect higher growth in 2H19 at 1.6 mb/d.
  • Non-OPEC supply growth will accelerate from 1.9 mb/d this year to 2.3 mb/d in 2020. The US leads the gains, but solid growth also comes from Brazil and Norway. In May, global oil supply eased by 0.1 mb/d to 99.5 mb/d, down 2.8 mb/d from the November peak.
  • The call on OPEC crude drops to 29.3 mb/d in 2020, 650 kb/d below the May output level. OPEC supply fell to its lowest since 2014 as Iranian supply plunged due to sanctions and on lower Saudi and Nigerian output. OPEC's effective spare capacity was 3.2 mb/d.
  • Global refinery throughput in May was at its lowest level in two years on maintenance and unplanned outages. By August, refinery runs could be more than 4 mb/d higher. In 2019-20, the global refining industry will add 3.5 mb/d of new capacity. 
  • OECD oil stocks rose by 15.8 mb in April to 2 883 mb, and are slightly above the five-year average. In days of forward demand, stocks amount to 59.9 days, 1.6 days below the average. Preliminary data for May show a significant build in US crude stocks.
  • Benchmark crude futures prices have fallen by 20% since late April partly due to concerns about the health of oil demand. However, the Brent forward curve remains in backwardation suggesting tight prompt markets. Gasoline cracks were pressured by abundant supplies.

With new pipelines and export terminals U.S. could easily do 2 mm bbls /d by itself 


Edited by Falcon
  • Upvote 1

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