OPEC+ cuts will need to be extended through 2020 just to keep the market in balance, according to Jefferies.

OPEC+ cuts will need to be extended through 2020 just to keep the market in balance.

That’s according to a research note sent to Rigzone this week by Jefferies, which pointed out that non-OPEC supply will grow by over 2 million barrels per day (MMbpd) next year while demand growth is “weak”.

“The decline in non-US, non-OPEC supply that we had expected to see after the 2014 price crash has simply not materialized and non-US, non-OPEC growth should reach its highest level in 15 years in 2020,” Jefferies analysts stated in the research note.

“U.S. growth could decelerate in 2020, but we still expect total liquids to be up 1.2MMbpd,” the analysts added.

In the note, Jefferies revealed that it had lowered its Brent oil price forecast to $61 per barrel from $64.5 per barrel for the second half (2H) of 2019 and to $59 per barrel from $62.8 per barrel for 2020. The company also lowered its WTI oil price forecast to $54 per barrel from $56.5 per barrel for 2H and to $52.5 per barrel from $54.8 per barrel for 2020.

Jefferies revised down its long-term forecasts for Brent and WTI too, to $62 per barrel, from $65 per barrel, and to $55 per barrel, from $60 per barrel, respectively.

Earlier this month, OPEC+ decided to extend output cuts for nine months to March 31, 2020. Prior to the meeting, a Jefferies research note sent to Rigzone expressed that an extension was highly likely.

OPEC+ is next scheduled to meet in early December, according to OPEC’s website.