OPEC Sees Surplus, Lower Demand for Oil

• OPEC Sees Surplus, Lower Demand for Oil

The Organisation of Petroleum Exporting Countries (OPEC) yesterday said its oil production jumped in June and forecast world demand for its crude will decline next year as rivals pump more. It pointed to a market surplus next year despite an OPEC-led output cut.

Giving its first 2018 forecasts in a monthly report, the oil cartel said the world will need 32.20 million barrels per day (bpd) of crude from its members next year, down 60,000 bpd from this year.

It said its oil output in June rose above the demand forecast, led by gains in Libya and Nigeria, two members exempt from the cut aimed at eliminating excess supply. Its officials nonetheless remain upbeat on the outlook.

“We remain very optimistic (about) helping the market to rebalance itself,” OPEC Secretary-General Mohammad Barkindo said at an industry conference in Istanbul.

Oil rose above $48 a barrel yesterday as a United States (U.S.) report of falling inventories in the U.S. raised hopes that the glut is easing.

OPEC referred to an “ongoing rebalancing” of the market.

Under the supply deal, it is curbing output by about 1.2 million bpd, while Russia and other non-OPEC producers are cutting half as much, until March next year.

The group’s production has increased in recent weeks, in part due to the recovery in Libya and Nigeria, which were exempted from the supply cut as domestic conflict had curbed their output.