OPEC raises 2018 oil demand outlook; says inventories down

The Organization of Petroleum Exporting Countries (OPEC) has revised upwards its estimates for world oil demand next year by nearly 130,000 barrels per day (bpd), while also noting a decline in OECD commercial stock levels over the first nine months of 2017.

Global oil demand is expected to reach 1.51 million bpd in 2018, compared to the group’s previous estimates of nearly 1.4 million bpd, OPEC said in its November oil market outlook report. Oil demand growth this year is expected to rise by 1.53 million bpd, up 74,000 bpd from previous outlook.

Separately, the report also noted that total OECD commercial stocks – a key indicator of the state of the oil market – dropped by 83 million barrels in the first nine months of this year, compared to a build of 38 million barrels in the same period in 2016.

Crude inventories fell by 23 million barrels in the year to September, while refined product stocks in the OECD declined by 60 million barrels, driven mainly by improving demand in OECD countries.

“The stock draw came as global oil demand growth rose by 1.6 million bpd (in first three quarters of 2017) compared to the same period in 2016, outpacing the 700,000  bpd net increase in global oil supply over the same period,” the report said.

On the other hand, the cartel revised down growth in non-OPEC oil supply for 2018 by 70,000 bpd to 870,000 bpd.

OPEC NGLs and non-conventional liquids are expected to grow by 180,000 bpd in 2018, following an increase of 170,000 bpd in 2017. The growth will be driven by a number of planned projects that are expected to be mainly in Saudi Arabia and Iran.

Last month, OPEC crude oil production fell 151,000 bpd, according to secondary sources, to average 32.59 million bpd, the report said.

Crude oil output increased in Angola, Libya and Saudi Arabia. Iraq saw the maximum decline, followed by Nigeria, Venezuela, Algeria and Iran.

According to secondary sources, production in Saudi Arabia rose from 9.983 million bpd in September to 10 million bpd in October. Based on direct communication, the Kingdom’s product stood at 10.056 million bpd.

Under OPEC’s output deal, Saudi Arabia’s production is capped at 10.058 million bpd.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com