The Organization of Petroleum Exporting Countries believes oil production outside its group of exporters will drop this year faster than previously expected, as the market slowly corrects the oversupply that has kept crude prices low for almost two years.
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Natural gas prices have also hovered near multi-decade lows as unseasonably warm weather reduced demand during the winter.
“Economic developments in Latin America and China are of concern”, OPEC said.
São Paulo – The Organization of Oil Exporting Countries (Opec) released this Wednesday (13) a downward revision of its forecasts for oil demand this year.
Meanwhile, the United States energy information administration (EIA) said it now expects U.S. production – which plateaued last year – to fall to 8.6 million bpd this year from an average of 9.4 million bpd last year, or 100,000 bpd lower than its previous forecast.
Opec warned on Wednesday that the world remains awash with crude ahead of a crunch meeting in Doha between cartel members and other major producers to discuss a production freeze to boost the oil price. But it reiterated that producer efforts to maintain output were making the forecast uncertain.
OPEC and non-OPEC countries are scheduled to meet on 17 April in Doha, Qatar, with expectations of an agreement on a production freeze even if Iran, an OPEC member and who has just returned to the crude markets post-sanctions, does not sign up to the deal.
Although still “slightly tilted” to the downside, OPEC said positive manufacturing data from China and the US in March and the potential of an upside in growth prospects in the US, Japan and the eurozone during the rest of the year advised to keep its global GDP growth forecast unchanged at 3.1% for 2016, in line with the IMF’s forecast of 3.2%.
OPEC pumped 32.25 million bpd in March, the group said citing secondary sources, up about 15,000 bpd from February.
Iran, which wants to regain market share after the lifting of Western sanctions on Tehran rather than freeze output, told OPEC it raised output by a minor 15,000 bpd to 3.40 million bpd.
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“Iran and Iraq remain the big swing factors, having driven OPEC output higher in March, while Saudi Arabia has been more neutral, keeping production steady since January”, said Eklavya Gupte, Platts senior editor.
