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OPEC sees slower growth in demand for its oil as rivals pump more

November 13/2017

MOSCOW (MRC) Ч Global demand for OPEC's crude will rise in the next two years more slowly than expected, the group forecast, as a recovery in prices resulting from an OPEC-led supply cut stimulates renewed output growth from non-members, as per Hydrocarbonprocessing.

The Organization of the Petroleum Exporting Countries also said in its 2017 World Oil Outlook that rapid adoption of electric vehicles could cause oil demand to plateau in the second half of the 2030s, denting OPEC's longer-term prospects. OPEC and rivals including Russia have been cutting output in 2017 to get rid of a glut. A resulting price rise is spurring a rebound in non-OPEC supply, the report shows, but OPEC still expects its market share to increase further down the line.

"It is evident that this major commitment to production adjustments has been central to the rebalancing process that the market has undergone this year," OPEC Secretary-General Mohammad Barkindo wrote in a foreword to the report. "The long-term focus for additional liquids demand remains on OPEC."

Demand for OPEC crude will reach 33.10 MMbpd in 2019, the report said. While up from 32.70 MMbpd in 2016, the 2019 figure is down from 33.70 MMbpd forecast in last year's report. OPEC raised its forecast for the supply of tight oil, which includes US shale. It said a rise in prices in 2017, plus sustained demand growth, had resulted in a higher forecast for supplies outside OPEC.

"The medium-term outlook for non-OPEC liquids growth has changed quite considerably," OPEC said in the report, referring to its 2016 forecasts. "Most strikingly, US tight oil production has exceeded previous growth expectations."Oil prices hit their highest since July 2015 on Monday, trading above USD62 a barrel. This year's report did not mention the oil price it assumes. Last year's report assumed OPEC's basket of crude oils would reach $65 in 2021.
Author:Anna Larionova
Tags:petroleum products, petrochemistry, Crude oil.
Category:General News
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