The oil market should be more balanced next year as China and the developing world use more oil while supply of fuel from North American shale grows more slowly, OPEC said on Monday.
In its monthly report, the 12-member Organization of the Petroleum Exporting Countries said it expected world oil demand to increase by 1.34 million barrels per day (bpd) in 2016, up from growth of 1.28 million bpd this year.
World oil demand growth should outpace any increase in oil supply from non-OPEC sources and ultra-light oils such as condensate, increasing consumption of OPEC crude, it said.
“This would imply an improvement toward a more balanced market,” OPEC’s in-house economists said in the report.
OPEC has increased production sharply over the last year as its most powerful member, Saudi Arabia, and other core producers in the Middle East Gulf attempt to build market share, leading to higher inventories worldwide.
OPEC said Saudi Arabia reported that it pumped 10.56 million bpd last month, up 231,000 bpd from May. According to industry data, that would be a record high.
Higher OPEC production has been a major factor behind a collapse in oil prices, which are now around half their levels of a year ago.