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OPEC sees lower demand for its oil in 2018, points to surplus

Reuters  |  LONDON 

By Alex Lawler

(Reuters) - World demand for OPEC's crude will decline next year as U.S. shale producers and other rivals pump more, said on Wednesday, suggesting the market will see a surplus in 2018 despite an OPEC-led output cut.

In a monthly report, the Organization of the Petroleum Exporting Countries 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.

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 percent of the cutback pledge, according to a 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.

(Additional reporting by Olesya Astakhova in Istanbul, Editing by Jason Neely and David Evans)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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