OPEC on Tuesday laid out an argument for cutting oil production to increase its price, directly contradicting a request from President Trump that it maintain current levels of supply.
“Although the oil market has reached a balance now, the forecasts for 2019 for non-OPEC supply growth indicate higher volumes outpacing the expansion in world oil demand, leading to widening excess supply in the market,” OPEC said in its monthly report.
{mosads}“The recent downward revision to the global economic growth forecast and associated uncertainties confirm the emerging pressure on oil demand observed in recent months.”
The report also noted that while world oil demand will rise by 1.29 million barrels per day in 2019, that estimation is 70,000 barrels per day less than predicted last month.
Despite U.S. sanctions on Iran that are driving down production, oil prices are currently in the middle of a sharp decline amid concerns that global demand is weakening.
The report said that crude oil production increased by 127,000 barrels per day after OPEC agreed to lower prices in June after pressure from Trump.
Trump on Monday again sought to assert his influence, urging OPEC not to cut oil supply.
“Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!” the president tweeted.
However, non-OPEC countries, led by the U.S., Canada, Russia and Kazakhstan, are expected to increase production of oil, according to the report.