Opec flags less oil demand growth ahead of freeze meeting

 
Jessica Morris
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AUSTRIA-OPEC
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The Organisation of Petroleum Exporting Countries (Opec) predicts global oil demand will be less than previously thought this year.

Opec cut its forecast for world oil demand growth by 50,000 barrels per day (bpd) in its closely watched monthly report released today.

It also warned there could be further downward revisions due to a slowdown in the emerging market economies, warmer weather in the Northern hemisphere and the scrapping of fuel subsidies in the Middle East.

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"Current negative factors seem to outweigh positive ones and possibly implied downward revisions in oil demand growth, should existing signs persist going forward," it said.

Optimism about a potential freeze deal between global producers in Doha on Sunday helped oil to its highest level this year yesterday.

Read more: Where big banks think the oil price is heading next

But prices fell back today, with the positive sentiment dampened by Saudi Arabia's assertion that a production cut remains off the table.

But the report did confirm low oil prices are beginning to hurt higher cost producers outside of Opec. The group now expects non-Opec output to fall by 730,000 barrels per day this year, up from the 700,000 barrels previously estimated.

This is due to lower than expected oil production in China, as well as further declines in the US and the UK where producers are scaling back projects due to low prices.

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