Opec forecasts lower demand in 2018 while production among its members rises for the second month

 
Courtney Goldsmith
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Opec member output increased again in June (Source: Getty)

Demand for crude oil from the Organisation of the Petroleum Exporting Countries (Opec) is expected to fall in 2018 as rival producers like the US ramp up production.

Global demand for the cartel's crude is estimated at 32.2m barrels per day (bpd) next year, down around 0.1m bpd from this year.

In its monthly oil market report, Opec also said production among its members increased by almost 400,000 barrels a day in June to 32.61m bpd, according to data from secondary sources. Production increased for the second month in a row despite an agreement to reduce output by 1.2m bpd.

Read more: Output among Opec members actually increased last month

Libya and Nigeria, which are exempt from Opec's cuts, pumped up production by more than 220,000 bpd in June. Saudi Arabia and Iraq also contributed to the rise in output.

In May, Opec extended a deal with non-Opec nations to reduce production by a total of 1.8m bpd until March 2018 to bolster prices. Brent crude prices have remained below $50 a barrel since the meeting.

In a note to clients yesterday, Goldman Sachs said the cartel must act with strength and surprise to keep prices from falling below $40 a barrel. The bank said Opec has an opportunity to do so at its next compliance committee meeting on 24 July.

Read more: Ophir Energy slashes 15 per cent of its workforce due to low oil prices

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