14 October 2018, Sweetcrude, Lagos — There has been a low demand for crude oil from members of the Organization of the Petroleum Exporting Countries, OPEC, the Vienna-based group to slash estimates of demand for its oil in both 2018 and 2019.
Statistics obtained from the group showed that due to the low demand, OPEC’s estimated demand for its crude grades in 2018 is at 32.7 million barrels per day, (mb/d), 0.8 mb/d lower than the 2017 level.
OPEC’s crude grades have currently been struggling to find a buyer at the international market. Two things can be said to have caused the low patronage of the grades: either because buyers now buy less due to higher prices or that they have now shifted attention to the cheaper shale crude.
Oil prices have since hit $85 per barrel majorly due to cuts by OPEC and its partners. OPEC and its partners are bent of reducing surplus at the market in order to push up prices to help its members’ economies which are reliant on how much made from crude oil exports.
The U.S. shale producers are not also helping matters as booming production has in one way, led to a crash in prices: this is exactly what President Trump wants as he had severally asked OPEC to pump more products into the market.
Having studied the trend of demand, OPEC again said its demand forecast for 2019 is at 31.8 mb/d, around 0.9 mb/d lower than the estimated level in 2018.
There have been various forecasts of oil not finding its way into the future energy mix causing lower demand, however, OPEC’s Secretary-General, Mohammad Barkindo, had argued against crude oil becoming extinct, saying it will still play a larger role in the future energy mix.