Saudi Arabia Oil & Gas Q1 2019
The outlook for Saudi Arabia's oil sector looks more clouded in 2019. The softer approach being adopted by the UStowards Iran has slackened the global oil market and undercut prices. Global demand growth is also slowing, putting pressure onOPEC to reduce its output to match consumption. We have downgraded our short-term oil production forecast to reflect this alteredmarket balance. The outlook for gas production remains bullish, with the kingdom progressing a number of projects, including amajor expansion at Hawiyah. Downstream capacity is also expanding, with Jazan set to reach fully capacity in 2019, boosting bothdomestic supply and exports. Oil demand growth, though, remains weak, dragged down by softer-than-expected economic activityand the aftershock of fuel subsidy reforms in January 2018. Gas demand continues to grow strongly, but is capped by domesticsupply constraints and the lack of import alternatives.
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