Organization of the Petroleum Exporting Countries (OPEC) on Tuesday revised upward its growth forecast for global oil demand in 2015 and maintained projected record levels of world consumption next year. This was contained in its August monthly report.
This upward review comes in spite of turbulent market conditions spurred by financial instability in Greece and China.
OPEC said it was expecting world oil demand to grow by 1.38 million barrels per day — some 90,000 more than announced in its July estimates.
The cartel also stuck to last month’s prognosis that demand growth in 2016 would reach 1.34 million barrels per day thanks to global GDP expansion set to reach 3.5 percent, up from 3.2 percent this year.
“Given the better-than-expected growth in global oil demand so far this year, together with some signs of a pickup in the economies of the major consuming countries, crude oil demand in the coming months should continue to improve and, thus, gradually reduce the imbalance in oil supply-demand fundamentals,” OPEC noted in its latest report.
Oil prices collapsed 60 percent between last June and January, hitting a low of $45. This was due in part to a supply glut caused by the boom in US shale oil.
But OPEC, which has traditionally defended price levels by cutting output when necessary, dramatically switched strategy last November when it opted to leave its production target unchanged.
OPEC has since stuck to this strategy, keeping its output target level at 30 million barrels per day.
On Monday, the World Bank warned that the lifting of sanctions related to Iran’s nuclear programme would have a “significant impact” on the world oil market in 2016.
Iran’s return to the global market would eventually add about a million barrels of oil a day, lowering prices by $10 per barrel, the bank said.
Oil markets have also been shaken by China’s reduced economic growth and collapsing stock market.
As a result of losses “triggered by China’s stock market slump” and global supply glut, US crude prices posted their biggest monthly drop since the 2008 financial crisis, with Texas light sweet declining to $47.12 per barrel on July 31.
OPEC stated that general expectations for Europe’s oil demand during 2015 have improved since OPEC’s last monthly report, but remain “coupled with large uncertainties” over the region’s economic developments, particularly in Greece, the cartel said.