OPEC forecasts crude oil demand growth for 2015-2016

The Organisation of Petroleum Exporting Countries (OPEC) released its July Oil Market Report on Monday, and the cartel raised its forecast of 2015 global demand growth by 100,000 barrels per day to 1.28 mln. Total consumption in 2015 is now pegged at 92.61 mln bpd, up from the prior forecast of 92.5 mln.

OPEC also has raised its forecast for 2016 global demand growth to 1.34 mln bpd, with total demand expected to reach 93.94 mln.

The cartel reported as well that the average price of a barrel of oil from its reference basket fell by $1.95 a barrel in June, from $62.16 in May to $60.21. OPEC noted that money managers continued to cut net long positions in the futures market.

Total OPEC crude oil production in June averaged 31.38 mln bpd, up 283,000 from May’s total. That is the highest monthly total so far in 2015 and well above the annual averages for 2013 and 2014. The total is based on non-OPEC estimates.

Total non-OPEC supply is forecast to average 57.69 mln bpd in 2016, up 530,000 barrels a day compared with the cartel’s May forecast, while noting that the forecast is “associated with a high level of risk.” U.S. product is forecast to grow from an estimated total of 13.85 mln bpd (including NGLs and other liquids) this year to an average of 14.18 mln bpd in 2016.

Total world oil supplies are now forecast at about 92.77 mln bpd in 2015, about 150,000 barrels a day more than total demand. From a producer’s point of view, that is a welcome improvement over the recent oversupply totals of more than 1 mln bpd.

The news on Monday regarding a potential deal between Greece and its lenders has not overcome the possibility in traders’ minds that a nuclear deal will be struck with Iran, leading to the possibility that Iranian production could rise by nearly 2 mln bpd. (Source: 24/7 Wall St.com)