Oil group sticks to its view that a strategy of letting prices fall will curb supply from the US and other rival producers
OPEC on Monday 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 United States and other rival producers.
The monthly report from the Organisation of the Petroleum Exporting Countries, however, trimmed its estimate for 2016 global oil demand growth and predicted a less dramatic slowdown in non-OPEC supply than the International Energy Agency.
OPEC said it expected demand for its crude next year to average 30.31 million barrels per day (bpd), up 190,000 bpd 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. But OPEC has refused to cut output, seeking to recover market share by slowing higher-cost production in the United States 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 increase by 160,000 bpd next year, a downward revision of 110,000 bpd from last month and marking a sizeable slowdown from growth of 880,000 bpd in 2015.
The 2016 forecast for US tight oil production, also known as shale, was reduced by 100,000 bpd.
But OPEC did not go as far as the IEA, which in its report on Friday said lower oil prices would force non-OPEC to cut output by the steepest rate in more than two decades next year.
The producer group also expects the recent strength in oil demand growth to moderate. OPEC trimmed its estimate of 2016 world oil demand growth by 50,000 bpd to 1.29 million bpd.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.