Macro Oils short-term outlook July 2019 Report

Commodity Market Report 28 June 2019

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Report summary

As the G20 leaders gather in Japan, the oil market faces two competing forces – the trade war and geopolitical risk. On the one hand, prices are under pressure because of fears global economic growth is at risk, due to the ongoing US trade war against China. On the other hand, escalating tensions between the US and Iran leave nearly 17 million b/d of oil exports at risk in the region if war were to flare up over the next months. Highlights of this Macro Oils Monthly Update include: -Small downward revision to our forecast for world oil demand growth to 1.0 million b/d for 2019 and 1.5 for 2020 -OPEC+ production restraint continues in H2 2019 and moderately in 2020. -World oil supply to gain only 0.7 million b/d this year as OPEC crude oil production revised downward -The outlook for the market is tightly balanced supply and demand for the remainder of 2019

Global Supply
OPEC: economic deterioration and sanctions take toll on Iran and Venezuela
Venezuela’s outlook for production continues to look increasingly difficult in 2020
Iran exports fall sharply as sanctions begin to bite
Non-OPEC supply: delay of Canada’s Line 3 Replacement pipeline points towards extension of Alberta production curtailments into 2020
Canada: mandated production cuts now expected to be extended, outlook for crude production in 2020 significantly downgraded
US Lower 48 supply: outlook remains for crude oil and condensate growth of 1.2 million b/d in 2019
Global demand