JAKARTA (RambuEnergy.com) – After going through some positive developments in 2018, the OPEC now sees sets of challenges in 2019, including potential lower demand for oil which could put pressure on global oil price.
“As we look forward to 2019, we see a new set of challenges. This includes the general consensus that prospects point to higher supply growth than expected global requirements and there are signs of a potential slowdown in demand,” Suhail Mohamed Al Mazrouel, UAE Minister of Energy and Industry, and President of the OPEC said at the opening of the 175th Meeting of the OPEC Conference in Vienna, Austria.
“Today, it is vital that we thoroughly examine the potential gap between supply and demand in 2019, and how this might impact inventory levels and the extremely ‘hard won’ market balance we have achieved over the past two years,” he said.
“I am confident that all member countries will continue to work with the OPEC Secretariat and our non-OPEC partners,” he said.
All OPEC members, he said, need to focus their joint efforts on maintaining the balanced market we achieved in 2018; sustaining the stability; and, ensuring that there is a firm foundation to allow the industry to make the necessary investments to continue to meet expected future oil demand.
“In this regard, we need to remind ourselves of the importance of a cooperative, agile, and forward-looking OPEC, and fully appreciate the value of the joint efforts with our non-OPEC friends through the historic ‘Declaration of Cooperation’,” he said.
Therefore, it is essential that the OPEC members look to move ahead with a more permanent relationship with non-OPEC producers, in order to continuously adapt to ongoing market dynamics and to help meet the challenges, as well as opportunities.
As for 2018, he has witnessed positive progress on removing the inventory overhang, the market has seen further rebalancing and there has been an excellent collaboration between OPEC and non-OPEC participants in the ‘Declaration of Cooperation’.
“I would like to acknowledge and commend the achievements of OPEC Member Countries, as well as participating non-OPEC producers in the ‘Declaration’, for their continuous efforts over the past two years to pursue a balanced, stable and sustainable global oil market. This serves the interests of consumers, producers, the industry and the global economy at large,” he said.
There is no doubt to date that the ‘Declaration’ has been a success, helping deliver more optimism to the market, confidence to the industry, and it has received backing from other producers, as well as from consumers, and various global institutions, he said.
On Nov. 11, 2018, the OPEC-Non-OPEC Joint Ministerial Monitoring Committee (JMMC) in Abu Dhabi reviewed the monthly report prepared by its Joint Technical Committee (JTC) and the short-term developments in the global oil market, including prospects, as well as scenario analysis for 2019.
The JMMC acknowledged the achievements of participating producing countries of the Declaration of Cooperation (DoC) and their continuous efforts in pursuing a balanced and sustainably stable global oil market, serving the interests of consumers, producers, the industry and global economy at large.
Additionally, the JMMC noted that countries participating in the DoC have achieved a conformity level of 104% in October 2018.
The Committee reviewed current oil supply and demand fundamentals and noted that 2019 prospects point to higher supply growth than global requirements, taking into account current uncertainties.
The Committee also noted that the dampening of global economic growth prospects, in addition to associated uncertainties, could have repercussions for global oil demand in 2019 – and could lead to widening the gap between supply and demand. (*)
Written by Roffie Kurniawan (email: email@example.com)