BP’s CEO sees oil demand growth despite economic fears

BP expects solid oil demand growth in 2019 despite growing concerns about a global economic slowdown, CEO Bob Dudley said Tuesday.

The British supermajor forecasts the world’s demanad for crude oil will grow by 1.4 million barrels per day (Mmbpd) in 2019. The projection is in line with the latest forecast from the International Energy Agency, but is higher than Opec’s, which forecasts demand growing at 1.29 Mmbpd this year.

“We’re not actually seeing this worrying thought that it’s all going to start falling,” Dudley told CNBC in an interview at the World Economic Forum in Davos, Switzerland.

BP’s in-house forecast sees the world economy expanding at 3% or more, and U.S. gross domestic product growing “a little bit under 3%,” according to Dudley.

Last month, the Federal Reserve cut its outlook for U.S. GDP growth for 2019 to 2.3%, down from a previous forecast of 2.5%.

Dudley told CNBC the oil market is tightening, but says a big question is whether the Trump administration continues granting sanction waivers, allowing several countries to continue buying Iranian crude.

Dudley said oil prices are returning to a reasonable balance following two overcorrections, one that saw oil prices spike to nearly four-year highs in October, and another that dropped prices to roughly 18-month lows in December.

“The world probably needs a fairway for oil prices, and somewhere between $50 and $65 (a barrel) seems to be a fairway for producers and consuming countries,” Dudley told CNBC.

Source: kallanish Energy