Opec sees ‘considerable uncertainty’ in oil market

Global oil demand growth is expected at 1.61m bpd in the second half of the year

After months of sharp oil price rises there is now considerable uncertainty as to the market’s direction for the rest of the year, Opec said yesterday.

Question-marks over global economic growth, and resulting oil demand, as well as over US producers’ capacity to pump oil at an ever faster pace make forecasting difficult, the Organisation of the Petroleum Exporting Countries said in its regular monthly oil market report. Various sources show that “considerable uncertainty as to world oil demand and non-Opec supply prevails”, Opec said.

For now, global oil demand growth is expected at 1.61 million barrels per day (bpd) in the second half of the year.

But uncertainty “warrants close monitoring of the factors impacting both world oil demand and non-Opec supply that will shape the outlook of the oil market going forward”, the report said.

Non-Opec suppliers include the US where producers have returned in droves.

Iraq said the Organisation of Petroleum Exporting Countries (Opec) should resist pressure to increase oil supplies, strengthening opposition to plans by Saudi Arabia as the group prepares to meet next week.

Opec’s second-biggest producer said supply curbs by the bloc haven’t yet achieved their

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Spot Gold purpose, with oil prices still below the desired level. Its defiance follows similar resistance from Iran and Venezuela, meaning three of the five countries that founded Opec now oppose the Saudi plan.

The US has reportedly asked Saudi Arabia and others to relax output restraints put in place in early 2017 as prices near $80 (Dh293) a barrel pose a threat to economic growth. The kingdom and Russia, which last month proposed raising supplies later this year without first consulting Opec members, appear to be raising production already. –0.09%

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“Producers from within and outside Opec have not yet reached the goals set,” Iraqi Oil Minister Jabbar Al Luaibi said in a statement. Iraq “rejects unilateral decisions made by some producers which do not consult with the rest.”

This is setting the scene for a fractious meeting when Opec and its partners gather in Vienna on June 22-23. Iran and Venezuela — both subject to US sanctions — have written to fellow Opec members urging unity against American pressure. UAE 22 ct Gold/10g —