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Opec sees lower demand in 2018

Opec officials are still upbeat on the outlook

Agencies  |  London 

Opec sees lower demand in 2018

World demand for Opec’s crude will decline next year as US shale producers and other rivals pump more, said on Wednesday, suggesting the oil market will see a surplus in 2018 despite an Opec-led output cut.

In a monthly report, the forecast 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 as rivals pump more.

also reported a jump in its June output to levels above the forecast of average global demand for its crude this year and next, hindering efforts to reduce a glut if it persists.

officials are still upbeat on the outlook.

"We remain very optimistic ... to helping the market to rebalance itself," Secretary General Mohammad Barkindo said at an industry conference in Istanbul.

Under the deal to support the market, is curbing output by about 1.2 million bpd while Russia and other non-producers are cutting half as much. With the glut slow to shift, producers agreed in May to prolong the accord until March 2018.

Earlier, Saudi Arabia will cut shipments to its customers in August by more than 600,000 barrels per day to balance the rise in domestic consumption during the summer, while staying within its production commitment, a Saudi industry source said.

production has increased in recent weeks, in part due to a recovery in supplies from Libya and Nigeria, two members which were exempted from the supply cut as conflict had curbed their output.

In the report, said its output rose by 393,000 bpd in June to 32.611 million bpd, according to figures from secondary sources uses to monitor its supply, led by Nigeria and Libya and also due to extra barrels from Saudi Arabia and Iraq.

The production data means has complied with 96 per cent of the cutback pledge, according to a Reuters calculation, down from more than 100 percent in May but still a high rate by Opec's historic standards.

"We are fully satisfied that member countries are maintaining a very high level of conformity," Barkindo said.

First Published: Thu, July 13 2017. 02:15 IST