Macro Oils short-term outlook: risk to demand, OPEC production restraint and economic concerns Report

Commodity Market Report 07 June 2019

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Report summary

Uncertainty about economic growth has weakened oil prices in recent weeks. For this monthly update, we are assuming no further tariffs beyond the early May escalation. On that basis, world oil demand in 2019 is forecast to grow 1.1 million b/d and for 2020 by 1.6 million b/d. We continue to show a tightly balanced market in Q3 2019 which will support prices and allow some recovery. Economic risk has increased, but for now the US government has backed off from its military threats against Iran. That removes the premium in price we saw earlier even while sanctions are cutting into Iran’s oil exports sharply. Key highlights from this month’s outlook are: -What to watch in demand: China’s diesel, the source of US growth, assessing the impact on demand if tariffs escalate, downward revisions to Iran and Venezuela supply, OECD crude stocks to fall H2 2019, and Lower 48 and non-OPEC growth.

Global supply: slowdown in growth as further downgrades made to OPEC
Non-OPEC supply
US Lower 48
OPEC
- Iran: crude oil exports fall lower than expected in May
- Venezuela: lower crude production expected in summer 2019
Global demand
- Global liquids demand grows by +1.1 million b/d in 2019 and +1.6 million b/d in 2020
Three things to watch: China's diesel, US demand growth by source, Iran/Venezuela
Tariff escalation scenario: a possible downside impact of over 400 kb/d by 2020

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Macro Oils short-term_outlook_June 2019 slidepack.pdf

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Macro Oils short-term outlook June 2019 data.xlsx

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Macro Oils short-term outlook: risk to demand, OPEC production restraint and economic concerns

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Macro Oils short-term outlook: risk to demand, OPEC production restraint and economic concerns

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Macro_Oils short term outlook June 2019 slide charts.xlsx

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