OPEC lowers demand forecast as US supply expectations soar
A new trade agreement with China could possibly boost demand for U.S. energy products
The U.S. oil market could break another production record this year – which may spell bad news for some other oil- producing countries.
U.S. liquids supply in 2020 is forecast at 18.81 million barrels per day – a 7.77 percent increase over last year, according to a new report from the Organization of Petroleum Exporting Countries (OPEC). By the fourth quarter of the year, it is forecast to reach 20.21 barrels per day – cracking the 20 million mark for the first time.
The U.S., Brazil, Canada and Australia were cited as key drivers of supply growth in 2019 and are expected to continue to lead growth in 2020.
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Total world oil demand is projected to rise to 100.98 million barrels per day in 2020 – but at the same time OPEC revised its demand forecast down to 29.5 million barrels per day.
West Texas Intermediate and Brent crude were both down less than 1 percent during the trading session on Wednesday.
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Another positive for the U.S. oil market? A newly signed phase one trade deal with China. As previously reported by FOX Business, while China has agreed to buy more than $50 billion in energy supplies from the U.S., it could end up buying even more due to the price advantage U.S. producers have over others.
Researchers from OPEC expect China and India to lead growth in demand for oil over the coming year.