OPEC expects lower demand
for its oil in 2016 than it previously forecast.
The oil cartel's crude
demand forecast was revised down by 100,000 barrels per day for the full-year,
slightly lower than its estimate last month, according to a report released
Monday.
"In 2016, demand for
OPEC crude is expected to stand at 31.5 million barrels per day, 0.1 mb/d,
lower than last month, and representing an increase of 1.8 mb/d over the
previous year."
It said overall demand for
oil, including sources outside OPEC, will increase by 1.25 million barrels per
day, as it had said in February. However it mentioned that it considered some
upward revisions to demand in "Other Asia, Asia-Pacific and Europe due to
better-than-expected data."
However, OPEC sees
"considerable uncertainty for 2016" in Europe. Possible economic
improvements combined with low oil prices in Europe could continue to support
demand in the region. OPEC explained that "unsolved budget deficits in
several countries — and policies aimed at increasing fuel taxation — pose
substantial downside risks."
It added that it lowered
its demand forecast for Latin America and countries in the former Soviet Union
on the "weaker-than-expected oil demand data and a slower economic
outlook." In particular, OPEC said it now forecasts a "larger than
expected contraction in 2016" for the economies of Brazil and Russia.
The oil cartel also
continues to see strong demand in the U.S. on preliminary data in the first
couple months of 2016. OPEC expects "strong growth in gasoline and jet
fuel requirements that is more than offset by sluggish distillate demand
(mainly as a result of the overall mild winter)."
According to its latest
monthly report, the oil cartel still expects non-OPEC oil supply to decline by
700,000 barrels a day in 2016.
(CNBC,
14 March 2016)