In its 167th Meeting of the Conference of the Organization of the Petroleum Exporting Countries (OPEC) which was held today, Friday, 5th June 2015, in Vienna, Austria, the delegates reviewed the oil market outlook, as presented by the Secretary General, in particular the demand and supply projections, and the outlook for the second half of 2015.
The Conference noted that the global economic recovery had stabilized, albeit with growth at moderate levels. In the current year, GDP growth is projected at 3.3%, with this expected to be at a slightly higher level of 3.5% for 2016.
Recording its continued concern over market volatility and the challenges faced by the global oil industry as a whole, the Conference observed, further, that the sharp decline in oil prices witnessed at the end of last year and the start of this year – caused by oversupply and speculation – had now abated, with prices moving slightly higher in recent months.
The Conference further noted that world oil demand is forecast to increase in the second half of 2015 and in 2016, with growth driven by non-OECD countries. On the supply side, non-OPEC growth in 2015 is expected to be just below 700,000 barrels per day, which is only around one-third of the growth witnessed in 2014.
The Conference also observed the recent build in stocks and the surplus of oil in both OECD and non-OECD countries, which has resulted in stock levels that lie well above the five-year average in terms of absolute volumes, indicating that the market is comfortably supplied.
In its concluding session, the Conference resolved to maintain the 30 mb/d ceiling and urged Member Countries to adhere to it. Member Countries, as OPEC noted in its official announcement, in agreeing to this decision, confirmed their commitment to a stable and balanced oil market, with prices at levels that are suitable for both producers and consumers. Nonetheless, the Conference stressed that, given the current market uncertainties, the Secretariat should continue to closely monitor developments in the coming months.
So far, market reaction has been subdued, with the Brent variety trading $ 61.67 per barrel at ICE for July deliveries, slightly less than its closing price yesterday at $ 62.25.