Opec faces a \u201cserious challenge\u201d if it wants to defend oil prices next year, as fuel-demand growth could slow further and rival supplies continue to grow, according to the International Energy Agency.
\nThe IEA \u2013 which advises major economies \u2013 could lower its forecasts for demand growth again as the economic backdrop continues to weaken, Neil Atkinson, head of the agency\u2019s oil industry and markets division, said in a Bloomberg television interview Wednesday. The agency lowered its projections in its monthly report last week.
\nAt the same time, there is \u201ca wave of new supply growth\u201d from the US, Brazil and the North Sea, Atkinson said. As a result, it will be tough for the Organization of Petroleum Exporting Countries and its allies \u2013 who have cut production this year to prevent a surplus \u2013 to buoy prices in 2020, he said.
\n\u201cThere is a lot of supply coming into the market, and that suggests that the Opec countries and Russia, who is working with them to manage the oil market, will face a serious challenge as we head into 2020 to keep prices at the level with which they feel comfortable,\u201d Atkinson said.
\nBrent crude futures traded below $59 a barrel in London on Wednesday, below the levels needed by most members of Opec to cover government spending.
\nThe group and its partners will do \u201cwhatever it takes\u201d to prevent another oil slump, Opec secretary-general, Mohammad Barkindo said in London last week.
\nThe IEA, which is based in Paris, trimmed its 2020 estimate for global oil-demand growth by 100,000 barrels a day to 1.2mn a day last week.
\nThe IEA incorporates forecasts from the International Monetary Fund, which on Monday reduced its outlook for global economic growth next year to 3.4% from 3.5%. The IMF anticipates that this year\u2019s expansion will be the weakest in a decade.
\n\u201cWhat the IMF numbers are doing is confirming a picture we have seen as 2019 has developed, and we are now looking at a possibility, no more than that, that the demand outlook could get weaker,\u201d Atkinson said.
\nStill, oil-demand data in recent months has been surprisingly strong, and so \u201cthe jury is still out as to whether we are definitively going to slash oil demand growth any further,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":"
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