By Srinivas Chowdary Sunkara // petrobazaar // 16th August, 2019.
OPEC Monthly Oil Market Report for August, 2019 is out. This report mentioned that the escalation of Geo-political tensions pushed the oil prices up in the month of July from their low levels, Registered a month earlier. The backwardation in both the Brent and Dubai price curves flattened in July due to high availability in the Atlantic Basin and softer crude demand in the first half of the month. Meanwhile, the contango curve structure of WTI flattened somewhat on significant declines in US crude oil stocks.
OPEC estimated a slight downward revision in the global GDP growth from previous month's revision at 3.1% while growth forecast remains at 3.2% for 2020. The economic growth forecast for 2019 is revised down for US and remains flat for Euro-Zone, China and India. Trade related uncertainties are prevailed in the market. However This report is in the opinion that the growth forecast doesn't assume any downside risk until the prevailing larger uncertainties actually materialize.
Turning to demand and supply, OPEC anticipated a downward revision of about 0.04 mb/d to grow by 1.1 Mb/d year on year in the demand growth from the previous month's projection due to weaker than expected data from OECD Americas. China and other Asia are expected to lead demand growth both in the non-OECD region. In 2019, non-OPEC oil supply is anticipated to grow by 1.97 mb/d y-o-y, a downward revision of 72 tb/d from the previous month's projection, due to lower than expected oil production in the US, Brazil, Thailand and Norway in 1H19. In July, OPEC crude production decreased by 246 tb/d to average 29.61 mb/d.