OPEC+ faces challenge from rivals’ rising output, says IEA

A fracking rig in the Permian Basin oil field in Texas. The IEA estimates non-OPEC supply growth will surge to 2.3 million barrels per day next year. (AFP)
Updated 15 November 2019

OPEC+ faces challenge from rivals’ rising output, says IEA

  • Sluggish refinery activity in the first three quarters has caused crude oil demand to fall for first time in a decade

LONDON: OPEC and its allies face stiffening competition in 2020, the International Energy Agency said on Friday, adding urgency to the oil producer group’s policy meeting next month.

“The OPEC+ countries face a major challenge in 2020 as demand for their crude is expected to fall sharply,” the Paris-based agency said in a monthly report.

The IEA estimated non-OPEC supply growth would surge to
2.3 million barrels per day (bpd) next year compared with 1.8 million bpd in 2019, citing production from the US, Brazil, Norway and Guyana.

“The hefty supply cushion that is likely to build up during the first half of next year will offer cold comfort to OPEC+ ministers gathering in Vienna at the start of next month,” it added.

While US supply rose by 145,000 bpd in October, the IEA said, a slowdown in activity that started earlier this year looks set to continue as companies prioritize capital discipline.

Demand for crude oil from OPEC in 2020 will be 28.9 million bpd, the IEA forecast, 1 million bpd below the exporter club’s current production.

The recovery by Saudi Arabia from attacks on the country’s oil infrastructure contributed 1.4 million bpd to the global oil supply increase in October of 1.5 million bpd.

Saudi state oil company Aramco, the world’s most profitable firm, starts a share sale on Nov. 17 in an initial public offering that may raise between $20 billion and
$40 billion.

It was the IEA’s last monthly report before the Dec. 5-6 talks among OPEC states and partners led by Russia on whether to maintain supply curbs aimed at buoying prices and balancing the market.

The agency kept its assessments for growth in global oil demand in 2019 and 2020 at 1 million bpd and 1.2 million bpd respectively, but said its outlook might slightly underestimate the impact of tariffs from the US-China trade war.

The IEA said that if some or all tariffs were lifted in coming months, “world economic growth and oil demand growth would both rise significantly,” though the rebound may not be immediate.

Sluggish refinery activity in the first three quarters has caused crude oil demand to fall in 2019 for the first time since 2009, the IEA said, but refining is set to rebound sharply in the fourth quarter and in 2020.


Hong Kong posts biggest airport passenger number fall in a decade

Updated 15 December 2019

Hong Kong posts biggest airport passenger number fall in a decade

  • The airport handled just over five million passengers, down 16.2 percent from a year earlier
  • Hong Kong has been gripped by sometimes violent protests since June

HONG KONG: Hong Kong International Airport reported its biggest fall in passenger numbers in more than a decade in November, official data released on Sunday showed.
The airport handled just over five million passengers, down 16.2 percent from a year earlier, Airport Authority Hong Kong said in a statement.
That was the largest fall since June 2009, when the figure fell by 18.7 percent, data on the Civil Aviation Department’s website showed.
There were falls of more than 12 percent in the three previous months, the Civil Aviation Department data showed.
Hong Kong has been gripped by sometimes violent protests since June. Demonstrators halted operations at the airport for several days in August.
The Airport Authority did not immediately comment.