OPEC raises 2017-18 oil demand growth forecast

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Tuesday, September 12, 2017

World oil demand in 2017 is expected to rise by 1.42Mb/d, OPEC said in its latest monthly oil market report, up 50tb/d from its prediction in last month's report.

"The adjustment mainly reflects better-than-expected data from OECD region for the 2Q17, particularly OECD Americas and Europe, as well as China," the crude exporters group said.

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"In 2018, world oil demand is anticipated to grow by 1.35Mb/d, an increase of 70tb/d from the previous report. This reflects higher growth expectations for OECD Europe and China."

The OPEC reference basket price rose for a second straight month in August to average US$49.60/b. On a year-to-date basis, the basket price was up 30.9% at US$49.73/b.

LATAM

Oil production in Latin America is expected to rise to average 5.26Mb/d in 2017, up 0.15Mb/d on 2016.

The increase will be driven by Brazil, where output is expected to climb by 0.26Mb/d. The report also highlighted that Brazil's economy grew by 0.3% in 2Q17, the first time it has expanded since 1Q14.

Declines in output are expected in the rest of the region, however, the crude exporters group said.

OPEC's Latin America category does not include Mexico, where output fell by 29,000b/d in July to average 2.28mb/d. Mexico oil production is seen falling by 0.17Mb/d in 2017 and 0.16Mb/d in 2018.

Latin American oil demand is expected to rise by 50tb/d in 2017 and 90tb/d in 2018, on the strength of general improvements forecast in the overall regional economy.

Oil production from OPEC member Venezuela continued its downward trend in August, averaging 1.918Mb/d, down from 1.95Mb/d the preceding month, based on data from secondary sources.

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