OPEC Expects Oil Production to Rise as Global Demand Grows

The global oil stocks surplus is close to evaporating, OPEC said on Thursday, citing healthy energy demand and its own supply cuts while revising up its forecast for production from rivals who have benefited from higher oil prices.


West Texas Intermediate graph

U.S. shale oil output has been booming over the past year since OPEC reduced its own production in tandem with Russia to prop up global oil prices.

But as oil production collapsed in OPEC member Venezuela and is still facing hiccups in countries such as Libya and Angola, the oil exporters’ group is still producing below its targets meaning the world needs to use stocks to meet rising demand.

The Organization of the Petroleum Exporting Countries said in its monthly report oil stocks in the developed world reversed a rise in January to fall by 17.4 million barrels in February to 2.854 billion barrels, around 43 million barrels above the latest five-year average.

“We have achieved an over 150 percent conformity level,” OPEC Secretary-General Mohammad Barkindo told Reuters in New Delhi, referring to OPEC’s commitments under the supply-cutting pact. He said the glut has effectively shrunk by nine-tenths since the start of 2017.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza