Namely, concerning the second half of 2019, IEA sees a stock draw of 0.8 mb/d, based on the assumption of flat OPEC production, stronger demand growth and weaker non-OPEC supply growth. Yet, this might not be achievable, as the non-OPEC development is measured against the high base set by the enormous production surge seen this time last year.
Output is strongly growing on a yearly basis, seeing an increase of 1.25 mb/d in 2019, with 1 mb/d of growth to come in 2020.
In Norway, long-awaited projects are coming on stream earlier than expected and may ramp up to peak production ahead of schedule. Oil production in Brazil is growing fast, reaching 3 mb/d in August, 0.4 mb/d higher than just two months earlier.
According to the oil market report, the second half of 2019 will better-support consumers, despite the 20% decrease in oil prices in comparison to a year ago. Early data for July suggest that global demand grew by 1.3 mb/d year on year.
Following the increasing tensions in the Middle East Gulf, the oil sector seems to be stable and oil operations are back in their normal pace.
Also, IEA focuses on a crucial political event that is taking place concerning a personnel change in Saudi Arabia, for the new energy minister, Prince Abdulaziz bin Salman, who is a well-known and experienced figure.
Up to now, support for the agreement rate has been high, but ahead of the meeting data for August show the compliance rate slipping to 116%. During August, Russia, Nigeria and Iraq, produced 0.6 mb/d more than their allocations. Yet, Saudi Arabia produced 0.6 mb/d less than allowed.
The challenge of market management remains a daunting one well into 2020
... comments IEA.
The OPEC+ producers will experience the non-OPEC oil production with the implied market balance returning to a signifcant surplus and placing pressure on prices.
Concluding, IEA comments that in light of the approaching IMO 2020 regulations, markets don't seem to make significant increases in diesel prices, yet this is a matter to be monitored in the future; IEA notes that they believe that the IMO regulations will be introduced with relatively little disruption.