Macro Oils short-term outlook September 2019 Report

Commodity Market Report 04 September 2019

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Report summary

The fundamentals show a tighter market in the rest of 2019 based on stronger growth in demand than earlier in the year. The narrow supply demand balance in H2 2019 means the market may be overacting to fears of slowing demand growth. To date, these concerns continue to weigh on market sentiment. Could the OPEC and non-OPEC Joint Ministerial Monitoring Committee on 12 September send a message of continued production cuts? Such a meeting can not make official decisions on production but can signal more cuts are to come at the December 2019 full gathering of OPEC and participating non-OPEC countries. The latest Macro Oils short-term outlook includes analysis on: -Demand growth in 2020 -US oil supply revised lower -Price outlook for 2019 and 2020 -Effect of tariffs on China’s US imports -Downward risk case for oil demand

Global supply: shifting patterns of supply growth emerging
Non-OPEC: slowdown of US onshore growth to accelerate in 2020
US Lower 48: lower rig counts, slowing activity and updated type curves
OPEC: deeper Saudi cuts slightly lower overall output
Global liquids demand growth: 0.7 million b/d in 2019; 1.3 million b/d in 2020
Various forces beyond macro economy also restrain demand growth in 2019
Unusually low H1 2019 demand growth affected by one-time factors
Conservative outlook for H2 2019 and 2020 demand
Tariff escalation scenario for 2020: a possible additional decline in global demand by 250,000 b/d