The group, which controls roughly a third of world oil supply, said in its latest monthly market report that oil demand in 2015 was now expected to grow by 1.28 million barrels per day (bpd), following an upward revision of 100,000 barrels from its last report.
Advertisement
How Long Will Oversupply Concerns Rule the Crude Oil Market?
OPEC said it expects expanding oil consumption to outpace diminished output growth from rival producers such as USA shale drillers, whittling away a supply glut. Higher OPEC production has been a major factor behind a collapse in oil prices which are now around half their levels of a year ago. Russian Federation is producing more crude oil in order to offset lower crude oil prices.
Benchmark Brent crude traded around $58.70 a barrel at 1230 GMT on Monday, down from a peak above $115 in June 2014.
The OPEC said that the supply of oil from non-OPEC producers was expected to grow by only 300,000 bpd in 2016, down sharply from 860,000 bpd this year.
Light, sweet crude futures for delivery in August CLQ5, -1.33% fell $1.08, or 2%, to $51.66 a barrel on the New York Mercantile Exchange.
Demand for the group’s crude will climb in 2016 by 900,000 barrels a day to average 30.1 million a day, according to the report.
That has posed a challenge to Saudi Arabia, which has said it wants to see market share shift back to countries with the lowest cost of production.
There was no total available for data submitted directly by OPEC members, because of omissions by Algeria, Libya and Venezuela. OPEC is predicting a more “balanced” market for next year, raising its outlook for oil consumption growth to 1.34 million barrels per day.
“This would imply an improvement towards a more balanced market”, OPEC’s in-house economists said in the report.
According to Saudi Arabia, the OPEC it pumped 10.56 million bpd last month, up 231,000 bpd from May.
Advertisement
For example, the amount of crude burnt to generate power previous year rose from around 350,000 bpd in March to almost 830,000 bpd in June, according to the Joint Oil Data Initiative (JODI). The Paris-based adviser forecast no growth in non-OPEC supply next year.
