• 2 hours UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 4 hours Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 6 hours Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 8 hours German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 9 hours Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 11 hours Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 1 day Oil Prices Rise After API Reports Major Crude Draw
  • 1 day Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 1 day Gazprom Speaks Out Against OPEC Production Cut Extension
  • 1 day Statoil Looks To Lighter Oil To Boost Profitability
  • 1 day Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 1 day Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 1 day Whitefish Energy Suspends Work In Puerto Rico
  • 1 day U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 2 days Thanksgiving Gas Prices At 3-Year High
  • 2 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 2 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 2 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 2 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 2 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 2 days ConocoPhillips Sets Price Ceiling For New Projects
  • 5 days Shell Oil Trading Head Steps Down After 29 Years
  • 5 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 5 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 5 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 5 days Venezuela Officially In Default
  • 5 days Iran Prepares To Export LNG To Boost Trade Relations
  • 5 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 6 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 6 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 6 days Rosneft Announces Completion Of World’s Longest Well
  • 6 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 6 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 6 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 6 days Santos Admits It Rejected $7.2B Takeover Bid
  • 7 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 7 days Africa’s Richest Woman Fired From Sonangol
  • 7 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 7 days Russian Hackers Target British Energy Industry
  • 7 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia

OPEC Sees Oil Demand Soaring In 2018

OPEC

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:




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