The New Diplomat with Agency Report
The Organisation of Petroleum Exporting Countries, OPEC, has said that world’s demand for its crude will slide next year.
According to the Cartel on Wednesday, despite OPEC’s effort to curb the glut, shale producers and other non-OPEC producers will flood the market, leading to decrease in demand for crude from OPEC producers.
In a monthly report, OPEC forecast that the world will need 32.20 million barrels per day (b/d) of crude from its members in 2018, down 60,000 bpd from this year.
OPEC also reported a rise in its June output to levels above the forecast of average global demand for its crude this year and next.
Under the deal, OPEC said it would cut output by about 1.2 million b/d while Russia and other non-OPEC producers are cutting half as much.
However, with the glut slow to shift, producers agreed in May to the extent the cut until March 2018.
Nigeria and Libya who were exempted from the cap have mostly been blamed for rebounding of the surplus.
In the report, OPEC said its output rose by 393,000 bpd in June to 32.611 million bpd, according to figures from secondary sources OPEC uses to monitor its supply, led by Nigeria and Libya and also due to extra barrels from Saudi Arabia and Iraq.
The OPEC production data showed that its members have complied with 96 percent of the cutback pledge, a decrease of more than 100 percent in May.
“We are fully satisfied that member countries are maintaining a very high level of conformity,” Barkindo said.
Saudi Arabia pumped 10.07 million barrels a day in June, boosting output from 9.88 mbpd in May, for the first time, surpassing the limit of 10.058m it accepted in the agreement.
Under the cap deal, SA agreed to reduce production by 486, 000 b/d.