Opec yesterday predicted higher demand for its crude oil next year, sticking to its view that a strategy of letting prices fall will curb supply from the US and other rival producers.
The monthly report from the Organisation of the Petroleum Exporting Countries (Opec), however, trimmed its estimate for 2016 global oil demand growth and predicted a less dramatic slowdown in non-Opecsupply than the International Energy Agency.
Opec said it expected demand for its crude next year to average 30.31m barrels per day, up 190,000 barrels per day from last month, despite slower demand growth overall due to a weaker outlook for Latin America and China.
Oil is trading below $50 a barrel, less than half its level of June 2014.
However, Opec has refused to reduce its output, seeking to recover market share by slowing higher-cost production in the US and elsewhere that had been encouraged by Opec’s former policy of keeping prices near $100.
“Despite moderate economic growth, recent data shows better-than-expected oil-demand in the main consuming countries,” Opec said in the report.
“At the same time, US oil production has shown signs of slowing.
“This could contribute to a reduction in the imbalance of oil market fundamentals, however, it remains to be seen to what extent this can be achieved in the months to come.”
Opec expects supply from non-member countries to rise 160,000 barrels next year, a downward revision of 110,000 barrels from last month and marking a sizeable slowdown from growth of 880,000 barrels in 2015.
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