اKHALEEJ TIMES, Wednesday, Sep 13, 2017 | Zul Hijjah 22, 1438
Opec sees higher oil demand in 2018
Opec on Tuesday forecast higher demand for its oil in 2018 and pointed to signs
of a tighter global market, indicating its production-cutting deal with
non-member countries is helping to tackle a supply glut that has weighed on
In a monthly report, the Organisation of the Petroleum Exporting Countries
(Opec) said the world would need 32.83 million barrels per day (bpd) of Opec
crude next year, up 410,000 bpd from its previous forecast.
Opec said inventories were falling and that an increase in the price of Brent
crude for immediate delivery to a premium to that for later supplies, known as
backwardation, raised hopes that a long-awaited rebalancing of the market is
"This is due to the shooting up of demand for prompt-loading barrels and amid
increasing sentiment that the oil market will rebalance over the next year with
a major drawdown in crude and product stocks," Opec said in the report.
"This first stirring of backwardation since oil prices were above $100 a barrel
is seen as a sign of tightening supplies and strong demand."
Oil added gains after the report was released, trading above $54 per barrel.
Prices are still less than half their levels in mid-2014.
In a deal aimed to clear the supply glut, Opec is curbing output by about 1.2
million bpd, while Russia and other non-Opec producers are cutting by half as
much, until March 2018.
Ministers are now discussing extending the pact by at least three months. Opec
in the report also said its oil output in August came in below the demand
forecast as output fell by 79,000bpd from July to 32.76 million bpd.
The figures mean Opec's compliance with its output-cutting pledge stands at 83
per cent, according to a Reuters calculation, down from 86 per cent initially
reported for July but still high by Opec standards.