LONDON (Reuters) – OPEC said on Wednesday it had offset a drop in sanctions-hit Iranian oil exports and lowered the 2019 forecast of demand for its crude, underlining the challenge the producer group faces to prevent a glut even after last week’s decision to trim output.
In a monthly report, the Organization of the Petroleum Exporting Countries said 2019 demand for its crude would fall to 31.44 million barrels per day, 100,000 bpd less than predicted last month and 1.53 million less than it currently produces.
Worried by a drop in oil prices and rising supplies, OPEC and its allies including Russia last week agreed to return to supply cuts next year. They pledged to lower output by 1.2 million bpd, of which OPEC’s share is 800,000 bpd.
OPEC expects global oil demand to slow next year and sees little support from the economic backdrop.
“Rising trade tensions, monetary tightening and geopolitical challenges are among the issues that skew economic risks even further to the downside in 2019,” OPEC said in the report. “The upside appears limited.”
In the report, OPEC said its oil output fell by only 11,000 bpd month-on-month to 32.97 million bpd in November, despite U.S. President Donald Trump’s reimposition of sanctions on Iran. Saudi Arabia pumped at a record rate.Iranian output posted the biggest decline, of 380,000 bpd. This was offset by increases of 377,000 bpd from top exporter Saudi Arabia and an extra 71,000 bpd from the United Arab Emirates.
The figures suggest there will still be a surplus in the market next year should OPEC fully deliver the 800,000-bpd cut and other things remain equal.
Qatar plans to leave OPEC in 2019 but, for now, remains in the OPEC group in the forecasts.