The IEA released its oil market report, finding that oil supply in the first half of 2019 exceeded demand by 900,000 barrels per day (bpd). It also found a global surplus of 500,000bpd compared to its previous estimate of a 500,000bpd deficit.
"This surplus adds to the huge stock builds seen in the second half of 2018 when oil production surged just as demand growth started to falter," the report noted. "Clearly, market tightness is not an issue for the time being and any re-balancing seems to have moved further into the future."
It continued to note that while the decision by OPEC and its allies to extend output cuts of 1.2mbpd would provide some guidance, "it does not change the fundamental outlook of an oversupplied market," and continued to note that demand for OPEC crude could fall to 28mbpd by early 2020.
The report also noted that oil demand growth in 2019 has not changed much since its last report, sitting at 1.2mbpd, while it sees a jump to 1.4mbpd "on the basis that the economic outlook in 2020 is better."