In 2019, European imports of crude and condensate will fall by 150,000 b/d to less than 9.9 million b/d as regional throughput drops for the second consecutive year and regional crude production remains more or less steady. European nations will import less crude from the Middle East, FSU, and Latin America. However, volumes from the U.S. will continue to rise.
The production allocations for OPEC/non-OPEC countries provide a bit more clarity than the December 7th Declaration of Cooperation. The document indicates a cut of 320,000 b/d for Saudi Arabia – smaller than the 450,000 b/d originally implied. On balance, we believe OPEC will get close to compliance. Non-OPEC participants to the deal, led by Russia, are unlikely to comply fully. For more on the market impact see our just-released Global Crude Oil Outlook.
In 2019, European demand for transport fuels will rise after increasing in 2017 and 2018. While this year’s demand growth deceleration was led by diesel, next year gasoline and jet fuel will be largely responsible. However, with demand for all three major fuels continuing to rise and regional throughput slated to fall, slowing demand growth will not prove too bearish.
Hellenic Shipping News:
According to ESAI Energy’s recently released One-Year Global Fuels Outlook, the U.S. gasoline surplus will expand by roughly 80,000 b/d next year as demand continues to plateau and output keeps rising. Since first moving into surplus in 2016 the U.S. gasoline balance has risen steadily to roughly 350,000 b/d this year. As a result of a growing surplus, combined U.S. exports of finished gasoline and motor gasoline blending components will rise to over 1.0 million b/d next year.