Opec keeps global oil demand forecast unchanged, sending the price of oil off its recent highs
The one-time global oil cartel Opec (the Organization of the Petroleum Exporting Countries) has kept its forecasts for global oil supply and demand unchanged.
The 13-member oil producing group reckons the second half of 2016 will continue to see oil markets rebalancing after the price of oil almost doubled in the first six months of the year – from $27 per barrel to over $50 last week.
Despite an improving outlook for the oil industry, the price – still less than half what it was in the summer of 2014 – has played havoc with suppliers around the world.
Global economic conditions are expected spur on growth of 3.1 per cent – leading to demand rising by 1.2m barrels a day to 94.18m.
India is thought to be the biggest growth driver for oil, though China is forecast to bolster demand.
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Oil prices fall back after publication of the report. Global benchmark Brent crude lost 0.35 cents to trade at $49.61 per barrel earlier. US West Texas Intermediate was earlier trading around $48.16.
Renewed fears over China's growth today have also contributed to a dip in prices.
The price rebound over the last six months has been put down to declining output among countries where production is more expensive.
Any expectations the market had that Opec would be able to act to curb supply and help clear the glut has now been all but wiped out after members broke off a meeting earlier this month without reaching an agreement on output.
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Opec pumped 32.36m barrels a day in May. Falling production in Nigeria, Venezuela, and Iraq led to output across the group dropping by 100,100 on April.
The group reckons that non-Opec production will fall by 740,000 barrels a day from 2015 to 56.4m barrels a day this year.
Expensive US shale oil will produce 420,000 fewer barrels a day than last year, knocking total output to 13.57m a day.
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Meanwhile de-facto Opec leader Saudi Arabia ramped up production by almost 100,000 barrels a day over the last month. The kingdom is now churning out 10.24m barrels a day.