DOHA: The OPEC Reference Basket (ORB), an important benchmark for crude oil prices, ended October higher, increasing by $2.21, or 2.9 percent month-on-month (m-o-m), to average $79.39/b. This is the highest monthly average since October 2014, the Opec monthly oil report noted yesterday.
Crude oil futures also peaked in early October, hitting a four-year high, with ICE Brent reaching $86.29/b, as the market focused on concerns over potential oil supply shortages. ICE Brent increased by $1.52 m-o-m, or 2 percent, reaching $80.63/b in October, while NYMEX WTI rose by 67¢, m-o-m, or 1.0 percent, averaging $70.76/b.
Year-to-date, ICE Brent was $20.54, or 39 percent, higher at $73.58/b, while NYMEX WTI increased $17.63, or 36 percent, to $67.23/b, compared with the same period a year earlier.
The Opec monthly report noted in 2018, oil demand growth is anticipated to increase by 1.50 mb/d y-o-y, a downward revision from the previous month of 40 tb/d, mainly due to weaker-than-expected oil demand data from the Middle East.
Expected total oil demand for the year is anticipated to reach 98.79 mb/d. In 2019, world oil demand growth is forecast to grow by 1.29 mb/d y-o-y, about 70 tb/d lower than last month’s projection, with total world consumption to reach 100.08 mb/d. Non-Opec oil supply growth in 2018 is estimated at 2.31 mb/d, an upward revision of 0.09 mb/d from the previous month’s assessment.
On the supply-demand balance, the Opec report noted demand for Opec crude in 2018 is estimated at 32.6 mb/d, 0.9 mb/d lower than the 2017 level. In 2019, demand for Opec crude is forecast at 31.5 mb/d, around 1.1 mb/d lower than the estimate 2018 level.
Commenting on the Opec-member countries’ economic performance, the report noted Qatar’s GDP expanded by 2.5 percent y-o-y in Q2, 18, up from 2.0 percent in Q1, 18. The sector of mining and quarrying shrank by 1.1 percent y-o-y in Q2, from a 2.1 percent decline in the previous quarter.
While the non-mining and quarrying sector posted growth of 6.1 percent y-o-y in Q2, up from 5.8 percent in the previous quarter. As a part of the non-mining and quarrying sector, manufacturing showed robust growth of 14.1 percent y-o-y in 2Q18, from 10.8 percent in 1Q18. The construction sector continued its strong performance.
