• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 4 hours Iran Loses $130,000,000 Oil Revenue Every Day They Continue Their Games . . . .Opportunity Lost . . . Will Never Get It Back. . . . . LOL .
  • 17 hours Shale Oil will it self destruct?
  • 1 day Berkeley becomes first U.S. city to ban natural gas in new homes
  • 1 day Iran Captures British Tanker sailing through Straits of Hormuz
  • 11 hours Renewables provided only about 4% of total global energy needs in 2018
  • 2 hours EIA Reports Are Fraudulent : EIA Is Conspiring With Trump To Keep Oil Prices Low
  • 2 days Drone For Drone = War: What is next in the U.S. - Iran the Gulf Episode
  • 2 days Today in Energy
  • 15 hours Oil Rises After Iran Says It Seized Foreign Tanker In Gulf
  • 3 days Mnuchin Says No Change To U.S. Dollar Policy ‘As of Now’
  • 3 days Populist, But Good: Elizabeth Warren Takes Aim at Private-Equity Funds
  • 2 days LA Solar Power/Storage Contract
  • 2 days Why Natural Gas is Natural
Alt Text

Oil Markets Not Impressed By Small Crude Draw

Oil prices fell slightly on…

Alt Text

Libya’s Oil Revenue Takes A Beating

Libya’s oil revenue fell significantly…

Alt Text

Oil & Gas Discoveries Rise In High-Risk Oil Frontiers

Global discoveries of conventional oil…

ZeroHedge

ZeroHedge

The leading economics blog online covering financial issues, geopolitics and trading.

More Info

Premium Content

OPEC Sees Oil Demand Soaring In 2018

True to its perpetually optimistic form, OPEC, which only last week for the first time conceded the threat posed by rising US shale production...

(Click to enlarge)

... sharply raised its demand forecast for cartel oil in 2018, ahead of a key meeting of the group’s ministers later this month. According to OPEC's monthly market report, the oil exporters said the forecast demand for its oil next year had been increased by around 400,000 barrels a day from the previous month to 33.4mmbpd, about 0.46mmbpd higher than in 2017. Overall, the cartel now expects global demand growth to rise by 1.53 million barrels a day in 2017 - an upward revision of 74kbps from the October report citing better than expected performance from China - and 1.51 million barrels a day in 2018.

The increase comes on the back of the recent global economic strength, which has exceeded many analysts’ expectations, helping to draw down inventories that built up during the crude glut since late 2014. Furthermore, the rise in demand has combined with the 1.8mmbpd in production cuts by OPEC and non-OPEC nations since January of this year to help tighten the market, pushing the price of Brent back above $60 a barrel for the first time in two years.

As the FT adds, cartel analysts said demand for Opec crude is expected to reach 34m b/d in the second half of next year, roughly 1.4mmbpd above what they pumped last month, according to secondary sources. As usual, oil demand is contingent not only on overall confidence (i.e. the stock market), but also whether the global economy is expanding or contracting, which all boils down to whether China is creating lots of new debt each month.

On November 30, OPEC is set to meet to decide whether to extend the cuts beyond March next year. Saudi Arabia and Russia, who have led the cuts, have both indicated they back extending the cuts deep into 2018 to keep drawing down stocks.

In the monthly report, OPEC also said Monday that crude oil production fell last month by 151,000 barrels a day. Crude output by members of the Organization of the Petroleum Exporting Countries dropped by 0.46 percent, to 32.59 million barrels a day in October, compared with the month prior. That decline was aided by reduced production in Iraq, Nigeria, Venezuela, Algeria and Iran. Production in Saudi Arabia rose by 17kpbd to 10 million barrels daily.

As the WSJ notes, the report "highlights the cartel’s increasingly successful efforts to rebalance the oil market by withholding production to reduce the global supply glut and boost prices." To be sure, none of the numbers below incorporate last week's striking FT report, according to which Saudi Arabia may be hiding 70mm barrels in above ground storage to give the impression of higher demand.

(Click to enlarge)

Related: Is China Heading Toward An Energy-Debt Crisis?

As the WSJ adds, the “high conformity levels” of the OPEC and non-OPEC participants in a deal to reduce crude output “have clearly played a role in in supporting stability in the oil market and placing it on a more sustainable path,” the report noted.

OPEC said commercial inventories in the Organization for Economic Cooperation and Development—a group of industrialized oil-consuming nations, including the U.S.—fell in September to just below 3 million barrels—154 million barrels above OPEC’s target of the last five-year average.

By Zerohedge

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment
  • Vishwas on November 14 2017 said:
    How the demand to be robust? Oil for power generation to fall or remain static as Solar power to meet the incremental demand in China, India. Incremental oil demand from passenger cars is to be replaced by electric cars replacing fuel cars. The demand is expected to restrict to only ships and trucks and from the farm sector. Better fuel efficiency will nullify the incremental demand. Home heating demand will be largely met by cheaper electricity. So, from where the additional demand arise? China economy likely to be either static or go down. Just fooling as usual. Oil supplies from Syria, Iran and Iraq are increasing to fund rebuilding. Venezuela will also forced to pump max to save from defaults. The prices are just popped up by creating new conflict interest - Qatar crisis. These tricks worked in past. Unlikely now as many non-OPEC supplies are strong.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play