The Organization of the Petroleum Exporting Countries (OPEC) on Tuesday warned that an oil supply glut could emerge in 2019 as the world economy slows and supply from rival producers rises more quickly than expected, building a case for cutting output at a meeting next month.
Worried by a price drop and rising supplies, OPEC is talking again of reducing production just months after increasing it.
Such a shift would worsen relations with U.S. President Donald Trump, who on Monday urged OPEC not to cut supply.
In a monthly report, OPEC said world oil demand next year would rise by 1.29 million barrels per day, 70,000 bpd less than predicted last month and the
fourth consecutive reduction in its forecast.
Non-OPEC supply would rise by 2.23 million bpd, the Vienna-based organization said, 120,000 bpd more than previously thought.
“Although the oil market has reached a balance now, the forecasts for 2019 for non-OPEC supply growth indicate higher volumes outpacing the expansion in world oil demand, leading to widening excess supply in the market,” OPEC said in the report.
“The recent downward revision to the global economic growth forecast and associated uncertainties confirm the emerging pressure on oil demand observed in recent months.”
Together with Russia and other non-OPEC producers, OPEC had agreed in
June to boost supply after pressure from Trump to lower prices, partially unwinding output cuts that began in January 2017.