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The Organization of Petroleum Exporting Countries (OPEC) predicts less demand for its crude oil next year as rivals increase yield. The leading oil exporter, Saudi Arabia, has reduced yields, aiming to avoid a repeat of oversupply.

In its monthly report, OPEC said the world would need 32.05 million barrels of crude oil per day from its 15 member states in 2019, down by 130,000 barrels per day from the forecast last month. The drop in demand for crude oil from OPEC means that other producers will be less pressured to catch up with lost supplies from Venezuela and Libya and possibly from Iran after the resumption of US sanctions.

The futures for the Brent variety declined to level below 73 USD per barrel after the OPEC report. The prices have fallen after surpassing 80 USD per barrel earlier this year for the first time since 2014, against expectations of rising supplies after OPEC adopted a mitigation agreement to reduce supply.

In its report, the organization is worried about the global trade strain, which has been tightening on crude oil prices in July, although it expects the market to be backed by refined products.

“The steady development of the world economy and the rise in industrial activity must support the demand for distillate fuels in the coming months, which will lead to a further reduction in diesel stocks”, said the OPEC report.

OPEC and a group of non-cartel countries agreed at the end of last month to return to a 100% implementation of the quota deal negotiated in January 2017 after the implementation reached more than 160% due to lower production in Venezuela and other countries

OPEC also notes that its oil yield in June has risen to 32.32 million barrels per day. Although it is higher than demand projections in 2019, yields increased only by 41,000 barrels per day since June, as the cuts in Saudi mining have offset the growth in other countries.

The rapid growth in oil demand, which has helped OPEC to balance the market, is expected to be more moderate next year. The organization predicts global demand for oil to grow by 1.43 million barrels per day, which is 20,000 barrels per day less than last month’s forecast. The growth is smaller compared to 1.64 million barrels per day in 2018.

The OPEC output in July is 270,000 barrels per day more than expected by the organization’s average oil demand next year, showing a small surplus on the market if it continues to produce the same amount and the other factors remain unchanged.

The higher prices have led to a rise in supply from competitors and US shale. The cartel expects shipments outside its member states to grow by 2.13 million barrels per day in 2019.