OPEC on Tuesday revised upward its growth forecast for
global oil demand in 2015 and maintained projected record
levels of world consumption next year, despite turbulent
market conditions spurred by financial instability in Greece
and China.
In its August monthly report, the Organization of the
Petroleum Exporting Countries 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.
Meanwhile, 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.

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