Key agency forecasts

Published at 11:37 11 Oct 2019 by

The past week has seen all three of the key agency forecasts published. The EIA published its STEO (Tuesday), OPEC released its MOMR (Thursday) and the IEA published the OMR today.

The key agency reports again revised demand forecasts down for both 2019 and 2020, with EIA, IEA and OPEC numbers increasingly converging on our forecasts of 0.82 mb/d y/y growth for 2019 and 1.04 mb/d for 2020. The EIA kept its absolute demand number flat for 2019, but this is now tracking y/y growth of 0.84 mb/d due to an upward revision to 2018. The EIA’s 2020 forecast was cut by 90 thousand b/d to 1.31 mb/d. Meanwhile, the IEA adjusted its demand outlook lower by 30 thousand b/d for 2019 and 0.13 mb/d for 2020, and now forecasts y/y growth of 1.01 mb/d for 2019 and 1.22 mb/d for 2020. OPEC revised global demand lower by 40 thousand b/d for both 2019 and 2020, now forecasting y/y growth of 0.98 mb/d and 1.08 mb/d.

Our balances show non-OPEC liquids growth of 1.93 mb/d in 2019 and 1.62 mb/d in 2020. All three agencies adjusted both 2019 and 2020 non-OPEC supply lower, led by cuts to US output. The EIA cut non-OPEC supplies by 90 thousand b/d for 2019 and 2020 non-OPEC supply was trimmed by 0.11 mb/d, with the EIA forecasting y/y growth of 2.07 mb/d in 2019 and 2.20 mb/d in 2020. The IEA reduced its forecast for non-OPEC supply by 20 thousand b/d for 2019 and 50 thousand b/d for 2020. The agency has adjusted its y/y supply growth estimates to 1.82 mb/d for 2019 and 2.23 mb/d for 2020. OPEC revised its non-OPEC supply estimates to 1.82 mb/d for 2019 (-0.14 mb/d m/m) and 2.20 mb/d for 2020 (-0.19 mb/d m/m).

Downward revisions to non-OPEC supply as well as adjustments to Saudi Arabian production led to an increase in key agency expectations for the 2019 and 2020 call on OPEC. Our estimates put Saudi Arabian production at 8.11 mb/d in September following the attacks on Abqaiq, versus 8.50 mb/d from the EIA, 9.02 mb/d from the IEA (supply) and 8.56 mb/d from OPEC secondary sources. This has increased our call on OPEC to 30.66 mb/d for 2019, while our 2020 estimate sits at 30.02 mb/d. The Secretariat’s call on OPEC crude is closest to our estimates at 30.73 mb/d in 2019 (+0.13 mb/d m/m) and 29.58 mb/d in 2020 (+0.18 mb/d m/m). The EIA revised the call on OPEC upward by 50 thousand b/d for each of 2019 and 2020, at 31.14 mb/d and 29.30 mb/d. The IEA’s call on OPEC is unchanged for 2019 at 29.99 mb/d, yet its 2020 call was lowered by 0.16 mb/d to 28.91 mb/d. Preliminary IEA crude stock data for September indicates a 3.7 mb draw in the OECD, led by Asia, lower than the five-year average of a 6 mb draw. However, products stocks were lower by 12.1 mb in September, more than double the five-year average rate of 6 mb. The total liquids overhang fell to 30.3 mb, with crude stocks still at a deficit to the five-year average.

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