OPEC Monday raised its estimate for world demand for its oil this
year as plunging oil prices triggered the first contraction in
non-OPEC supply since 2008.
Demand for OPEC's oil will rise to an average 31.65 million b/d in
2016, from 29.90 million b/d in 2015, the producer group said in its
latest monthly report.
The estimate, which includes output from OPEC's latest member
Indonesia, was 810,000 b/d higher than its previous forecast.
Non-OPEC supply averaged 56.87 million b/d in 2015, up 1.23 million
b/d from 2014, OPEC said. But the further oil price collapse in the
first weeks of 2016, means non-OPEC oil supply is now projected to
contract 660,000 b/d this year to 56.21 million b/d, down 270,000
b/d from previous estimates.
"The revision has been due to stronger declines expected in the
US and Canada caused by the lower price environment," OPEC said.
"After seven straight years of phenomenal non-OPEC supply growth,
often greater than 2 million b/d, 2016 is set to see output decline
as the effects of deep capex cuts start to feed through."
The largest decline in non-OPEC output was expected to come from the
US which was seen falling 380,000 b/d on the year to 13.5 million
b/d in 2016.
OPEC also raised its estimate for global oil demand this year
slightly, with growth of 1.26 million b/d expected to take the total
to 94.17 million b/d.
OPEC said the glut of crude oil and the notable slowdown in China's
economy and its effects on oil demand continued to be the key
factors on the fall in oil prices that began 18 months ago.
Chinese oil demand was still expected to grow 290,000 b/d this year
to average 11.13 million b/d, OPEC said.
OPEC said a deterioration in key equities markets, particularly
China's, a stronger dollar, and a warmer than usual start to winter
in the northern hemisphere caused lower demand for physical crude
and contributed to a significant build in crude and product
inventories.
OPEC OUTPUT SLIP
OPEC estimated Indonesia, which rejoined the producer group last
month, produced 700,000 b/d in 2015 while production of natural gas
liquids (NGL) averaged 170,000 b/d. As a result, non-OPEC supply in
2015 was adjusted lower by a combined figure of 870,000 b/d.
Including its new member, OPEC's oil production slipped more than
200,000 b/d last month, it said.
OPEC's 13 members collectively pumped 32.18 million b/d in December,
down 210,600 b/d month on month, OPEC said, citing secondary
sources.
Saudi Arabia, OPEC's biggest producer, produced 10.09 million b/d in
December, down 57,700 b/d from November, according to OPEC, the
lowest since February 2015. Saudi Arabia told OPEC, however, its
output was 42,000 b/d lower month on month at 10.44 million b/d.
Production fell in December at most OPEC members -- but not from
Ecuador, Iran, Libya and the UAE -- with Nigeria seeing the biggest
month-on-month fall, of 77,200 b/d, OPEC said.
Iran, expected to boost oil exports substantially in coming months
following the lifting of sanctions at the weekend, pumped 2.88
million b/d last month, up marginally from November.
--Robert Perkins,
robert.perkins@platts.com
--Eklavya Gupte,
eklavya.gupte@platts.com
--Edited by Dan Lalor,
daniel.lalor@platts.com
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