2016-01-19 20:10:00
OPEC SEES MORE
OPEC Monday raised its estimate for world demand for its oil this year as plunging oil prices triggered the first contraction in non-OPEC supply since 2008.
Demand for OPEC's oil will rise to an average 31.65 million b/d in 2016, from 29.90 million b/d in 2015, the producer group said in its latest monthly report.
The estimate, which includes output from OPEC's latest member Indonesia, was 810,000 b/d higher than its previous forecast.
Non-OPEC supply averaged 56.87 million b/d in 2015, up 1.23 million b/d from 2014, OPEC said. But the further oil price collapse in the first weeks of 2016, means non-OPEC oil supply is now projected to contract 660,000 b/d this year to 56.21 million b/d, down 270,000 b/d from previous estimates.
"The revision has been due to stronger declines expected in the US and Canada caused by the lower price environment," OPEC said.
"After seven straight years of phenomenal non-OPEC supply growth, often greater than 2 million b/d, 2016 is set to see output decline as the effects of deep capex cuts start to feed through."
The largest decline in non-OPEC output was expected to come from the US which was seen falling 380,000 b/d on the year to 13.5 million b/d in 2016.
OPEC also raised its estimate for global oil demand this year slightly, with growth of 1.26 million b/d expected to take the total to 94.17 million b/d.
OPEC said the glut of crude oil and the notable slowdown in China's economy and its effects on oil demand continued to be the key factors on the fall in oil prices that began 18 months ago.
Chinese oil demand was still expected to grow 290,000 b/d this year to average 11.13 million b/d, OPEC said.
OPEC said a deterioration in key equities markets, particularly China's, a stronger dollar, and a warmer than usual start to winter in the northern hemisphere caused lower demand for physical crude and contributed to a significant build in crude and product inventories.
OPEC OUTPUT SLIP
OPEC estimated Indonesia, which rejoined the producer group last month, produced 700,000 b/d in 2015 while production of natural gas liquids (NGL) averaged 170,000 b/d. As a result, non-OPEC supply in 2015 was adjusted lower by a combined figure of 870,000 b/d.
Including its new member, OPEC's oil production slipped more than 200,000 b/d last month, it said.
OPEC's 13 members collectively pumped 32.18 million b/d in December, down 210,600 b/d month on month, OPEC said, citing secondary sources.
Saudi Arabia, OPEC's biggest producer, produced 10.09 million b/d in December, down 57,700 b/d from November, according to OPEC, the lowest since February 2015. Saudi Arabia told OPEC, however, its output was 42,000 b/d lower month on month at 10.44 million b/d.
Production fell in December at most OPEC members -- but not from Ecuador, Iran, Libya and the UAE -- with Nigeria seeing the biggest month-on-month fall, of 77,200 b/d, OPEC said.
Iran, expected to boost oil exports substantially in coming months following the lifting of sanctions at the weekend, pumped 2.88 million b/d last month, up marginally from November.
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