OPEC is reported to have just improved its revised forecast for the global oil demand for this year. To be more specific, the cartel expects the demand for crude oil to increase by 1.3% YoY all the way up to 95,6 million barrels a day. This is what January’s OPEC report indicates.
Experts say that the revised forecast resulted from higher oil demand coming from Europe due to cold weather forecasts and shortage of fuels for various kinds of transport. To be more specific, the demand for OPEC oil is expected to increase all the way up to 32,1 million barrels a day. At the same time, the production of crude oil in non-OPEC nations is probably going to increase up to 57,3 million barrels a day, experts say.
Back in December 2017, OPEC already released the preliminary 2017 oil forecast. However, due to the changes made to the cartel’s oil production in the first half of 2017, they decided to revise the forecast. At the same time, the U.S. forecast was also revised in favor of higher volume due to an increasing amount of oil rigs and stronger cash flows.
Meanwhile, the IFM’s oil price forecast was also increased to make the average price of crude oil in 2017 equal to 51,2 dollars per barrel. In 2018, the IMF expects the average price of crude oil to be around $53/b.
The forecasts were also revised due to the fact that OPEC and non-OPEC nations agreed to cut their oil production by 1.2 million and 600K barrels a day respectively. This step is aimed at reducing the oversupply of crude oil in the global market and back higher oil prices in the future. Some experts believe that another reason for improved oil forecasts has to do with more positive expectations regarding the Chinese economy, which is the world’s biggest consumer of crude oil.
