Premashish Das, ED at IHS Markit, spoke to CNBC-TV18 about the current trend in crude oil prices and shared outlook.

On the US inventories decline, Das said, “The US market is changing dramatically, particularly US inventories coming down. The fact of the matter is US production is likely to increase significantly going forward. Right now what we are seeing is essentially kind of a situation where maybe the Permian Basin production is somewhat restricted so over time as the new capacities come on line, the pipeline capacities, takeaway capacities come on line so that will essentially will increase the US production.”

“End of this year, first of January 2020, we would see this IMO comes into the picture, IMO regulation and once this comes in then we need a lot more distillates. As per overall crude market perspective, there are enough supplies there, so there are a lot of disruptions there, lot of uncertainties there but US production eventually will increase going forward.”

On the demand outlook, Das said, “This is the first time we are seeing the demand is the driver for the oil price drop, previous all the price drops came from the large supply availability. The demand situation is really bad. We have revised our demand growth for 2019 down to 1.1 million barrels now for this year.”

Talking about India’s demand, he said, “Indian demand is typically much lower. If you look into 2015-2016 Indian demand was growing at about 8-9 percent year-on-year (YoY). Now that number for the last couple of years even this year is maybe 3-4 percent kind of level.”