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Oil Market Snapshot – November 2019 No New Targets As Saudi Arabia Attempts To Enforce Compliance

Brent recovered slightly in November, trading at $63.87 on 28th November, against October’s average of $59.71/bbl. Less headwind from recent macro-economic data, combined with increasing realisation that US LTO production growth will likely slow in 2020, prompted the rise. Still, our global demand growth forecast for 2019 is revised down to 940,000 b/d (-30,000 b/d m-o-m) on downward revisions of OECD consumption growth, particularly the US. There are also some discrepancies in oil data regarding China, with international and state agencies reporting conflicting numbers. Our global supply growth forecast for 2019 is unchanged at 110,000 b/d, and 1.97 million b/d in 2020 even as US LTO growth weakens. We see the annual average Brent price at $63.89/bbl in 2019 and $62.15/bbl in 2020 (-$0.47 and unchanged on previous, respectively). OPEC will meet over four days from 3rd December, amid press statements of no new targets but a renewed focus on compliance. We consider new targets to be practically meaningless and politically impossible, but also see issues in enforcing the existing targets....

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