The Organization for Economic Cooperation and Development, believes that oil demand growth will rebound to 3.4% in 2020, provided that trade disputes are resolved and confidence rebuilds
The OECD sees global GDP growth rebounding to 3.4% in 2020, assuming that trade disputes are resolved and confidence rebuilds.
In 2Q19, we see a growth in global demand of 0.1 mb/d lower than in last month’s report. For now, there is optimism that the latter part of this and next year will see an improved economic picture.
In contrast, the world not belonging to the OECD recorded an increase in demand of 0.9 mb/d. Although recent data from China suggest that growth in April was 0.2 mb/d.
The main weakness was in OECD countries where demand fell by a significant 0.6 mb/d, spread across all regions. There were various factors: a warm winter in Japan, a slowdown in the industry in Europe, and tepid gasoline and diesel demand in the U.S., with the worsening trade outlook a common theme across all regions.
The consequences for oil demand are becoming apparent. In 1Q19, growth was only 0.3 mb/d versus a very strong 1Q18, the lowest for any quarter since 4Q11.
In May, the Organization for Economic Cooperation and Development (OCDE), published an outlook for global GDP growth for 2019 of 3.2%. World trade growth has fallen back to its slowest pace since the financial crisis ten years ago, according to data from the Netherlands Bureau of Economic Policy Analysis.
The main focus is on oil demand as economic sentiment weakens
The agency assures that, during the development of this report, volatility has returned to oil markets with a dramatic sell-off in late May seeing Brent prices fall from $70/bbl to $60/bbl. Until recently, the focus has been on the supply side with the family list of uncertainties – Iran, Venezuela, Libya, and the Vienna Agreement – lifting Brent prices above $70/bbl in early April and keeping them there until late May.
The International Energy Agency has published its first perspective for 2020 on the oil industry.
The Organization for Economic Cooperation and Development, believes that global GDP growth will rebound to 3.4% in 2020, provided that trade disputes are resolved and confidence rebuilds.