Macro Oils short-term outlook December 2019 Report

Commodity Market Report 10 December 2019

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Report summary

At the 5-6 December 2019 meeting, OPEC+ agreed to continue its current production restraint of 1.2 million b/d while adding another 0.5 million b/d of supply cuts through March 2020. For our base case view, we had factored in overcompliance from Saudi Arabia and its Gulf OPEC allies already. In response to the OPEC+ meeting we made small downgrades to relevant production outlooks in early 2020. The net effect is minor, but they help offset the impact of an upward revision to non-OPEC supply and downward adjustments to demand in Q1 2020. The report covers: OPEC+ meeting and its effect Downgrade to Q4 2019 India demand Strength of non-OPEC supply outside the US in 2020 One off factors driving demand in 2019 and 2020 Please see our Oil price outlook for the latest Macro Oils content.

Global supply: limited supply changes despite OPEC+ agreement for deeper cuts
Non-OPEC: minor changes, Russian condensate exempt from OPEC+ cuts
US Lower 48: onshore unchanged
OPEC: new deeper cuts and growing unrest in North Africa and the Middle East
Unrest poses threat to 2020 OPEC supply
Global liquids demand growth averages 1.0 million b/d in 2019-2021, with risks skewed to the downside