OPEC on Monday predicted higher demand for its crude oil next year, sticking to its view that a strategy of letting prices fall will tame the USA shale boom and cut a global surplus.
OPEC revised up the demand for its crude this year by about 400,000 barrels a day to 29.3 million barrels. Iran’s oil production increased by 4,000 barrels per day to 2.857 million barrels per day while Iraq’s oil production decreased by 86,000 barrels per day to 4.062 million barrels per day.
Iran is gearing up to produce and export more crude oil early next year, when western sanctions are expected to be lifted as part of a deal over the country’s nuclear program.
The agency’s predictions are among the gloomiest for American oil production to emerge since US crude prices crashed last month to less than $40 a barrel for the first time since the financial crisis, before recovering to about $45 a barrel.
Producers outside of the USA are also adjusting to lower oil prices. “Indeed, all eyes are on how quickly United States production falls”, it added. “While the group of emerging and developing economies has been the main growth engine in recent years, it has become clear that growth in this group is slowing down”, said OPEC. “This could contribute to a reduction in the imbalance of oil market fundamentals, however, it remains to be seen to what extent this can be achieved in the months to come”, it said.
Even with higher demand and falling supplies in the USA and other non-OPEC countries like Russian Federation, prices could remain low through 2016, Goldman Sachs said Friday.
“This will upset the price”, the Iraqi official said. 265 million barrels a day last month, down from 10.361 million barrels a day in July. “So the prices will be lower”, the Iranian official said.
Total production from OPEC’s 12 member countries rose slightly by around 13,200 barrels a day in August to more than 31.5 million barrels, compared with July.