OPEC forecast higher demand for its oil in 2018 due to rising global consumption and slower supply growth from rivals, although another jump in the group’s output suggested the market will remain in surplus despite efforts to rein in production.
In a monthly report on Thursday, the Organization of the Petroleum Exporting Countries said the world would need 32.42 million barrels per day (bpd) of its crude next year, up 220,000 bpd from the previous forecast.
The Organization of the Petroleum Exporting Countries was also upbeat about 2018 economic growth and said oil stocks in developed economies declined in June and would fall further in the United States, a sign the OPEC-led supply cut is working.
“With the ongoing growth momentum and an expected continued dynamic in second-half 2017, there is still some room to the upside,” OPEC said in the report.
“Further declines in U.S. crude stocks are likely, given the record rates at which U.S. refineries are running.”
But the 14-country producer group also said its oil output in July came in above the demand forecast, led by gains in Libya and Nigeria, two members exempt from the cuts aimed at eliminating excess supply.
In the report, OPEC said its oil output rose by 173,000 bpd in July to 32.87 million bpd, led by the exempt producers plus top exporter Saudi Arabia.
The figures mean OPEC has complied 86 percent with its output-cutting pledge, according to a Reuters calculation, down from 96 percent initially reported for June but still high by OPEC standards.