OPEC raises oil demand forecast for 2015

The Organisation of the Petroleum Exporting Countries (OPEC) has revised its forecast for global oil demand in 2015 amid market turmoil stirred by financial crisis in Greece and China.

In its August report, OPEC predicted global increase in oil demand to reach 1.38 million barrels per day, nearly 90,000 more barrels compared to its July forecast.

The organisation maintained month’s forecast in terms of demand growth during 2016 to reach 1.34 million barrels per day as a foreseen result of global GDP expansion, which is expected to reach 3.5 per cent in 2016 compared to 3.2 per cent this year.

“Given the better-than-expected growth in global oil demand so far this year, together with some signs of a pickup in the economies of the major consuming countries, crude oil demand in the coming months should continue to improve and, thus, gradually reduce the imbalance in oil supply-demand fundamentals,” OPEC said in its report.

Oil prices fell by 60 per cent between June and January to reach $45 per barrel.

This is due in part to a supply glut in US shale oil production.

But OPEC, which traditionally defends price levels by cutting oil production when necessary, changed its strategy dramatically in November by keeping its production levels unchanged.

The World Bank warned on Monday that lifting sanctions on Iran would have “a significant effect” on world oil markets in 2016.

Iran’s return to the market will lead to an increase of one million barrels per day, which according to the bank will lower the price by about $10 a barrel.

The decline in Chinese economic growth and the collapse of the Chinese stock market has recently caused turbulence in the oil markets. As a result of losses “triggered by China’s stock market slump” and global supply glut, US crude prices reported their biggest monthly drop since the 2008 financial crisis, with Texas light sweet declining to $47.12 per barrel on 31 July.

OPEC said its forecast for European oil demand during 2015 has improved since the organisation’s report last month, but that it remains “coupled with large uncertainties” in terms of the region’s economic developments, particularly in Greece.