In its Monthly Oil Market Report for July, released Tuesday morning, the Organization of the Petroleum Exporting Countries (OPEC) noted that the cartel’s price for its reference basket rose by 6% in June, a fifth consecutive month of rising prices. The basket price rose $2.63 to $45.84 a barrel.
Global demand growth for 2016 remained unchanged from last month’s report at 1.2 million barrels per day, or a daily average of 94.2 million barrels. In its first forecast for 2017 demand growth, the cartel projected growth at 1.2 million barrels a day to average 95.3 million barrels. The bulk of growth is projected to originate in non-OECD countries, which are expected to contribute 1.1 million barrels a day, while OECD demand will rise by 100,000 barrels a day.
The cartel raised its estimate of non-OPEC production for 2016 and now forecasts non-OPEC supply will drop by 900,000 barrels a day and average 56 million barrels a day for the year. The prior estimate called for a production drop of 740,000 barrels a day and an average of 56.4 million barrels a day.
The cartel said OPEC production in June, as reported by secondary sources, rose by 264,000 barrels a day to a daily average of 32.86 million barrels. That total is 130,000 barrels a day higher than an estimate by Platts published on Monday.
The cartel also raised its estimate of 2016 demand for OPEC crude from 31.5 million barrels a day to 31.9 million barrels a day in the June report. OPEC last changed this estimate in April, when it projected an increase of 1.8 million barrels a day compared with last year.
In its first outlook estimates for the 2017 oil market, OPEC estimates that the non-OPEC supply of crude will drop by 110,000 barrels a day, with the largest declines coming in production from Mexico, the United States and Norway, among others. Demand on OPEC is forecast to average 33 million barrels a day in 2017, up 1.1 million barrels a day compared with current projections for 2016. That is a smaller increase than the 1.9 million barrel jump between 2015 and 2016.
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