In a monthly report, the Organization of the Petroleum Exporting Countries said the world would need 33.42 million barrels per day (bpd) of OPEC crude next year, up 360,000 bpd from its previous forecast, Reuters wrote.
The 14-country producer group also said its oil output in October, as assessed by secondary sources, came in below the 2018 demand forecast at 32.59 million bpd, a drop of about 150,000 bpd from September.
The report points to a supply deficit next year if OPEC keeps pumping at October’s rate.
OPEC and Russia have been leading a worldwide coalition of oil producers this year in production cuts aimed at ending a glut that has weighed on prices and battered their economies since 2014. They’ll meet on Nov. 30 in Vienna, where they may decide to prolong the measures beyond their scheduled end in March, according to Bloomberg.
Output cuts are the “only viable option” for completing the rebalancing of the market, OPEC Secretary General Mohammad Barkindo said in Abu Dhabi on Monday. Last week he said that no producers opposed continuing the accord and the only question was the duration of the extension.
Brent has gained 12 percent this year, and the benchmark grade was trading unchanged at $63.52 a barrel in London at 12:53 p.m. local time.
“We are seeing clear indications that the market is rebalancing at an accelerating pace and stability is steadily returning,” Barkindo said. “I am certain that if we had not mobilized ourselves when we did, building consensus and jointly taking action in responding to the crisis, the industry would be in worse condition than it is today.”
The report showed that supply curbs by OPEC, Russia and their partners are paying off. Oil inventories in developed nations dropped again in September, bringing the total decline this year versus their five-year average to 183 million barrels. OPEC has said its main objective is to return stockpiles to the five-year mean; they remain 154 million barrels above this level.
OPEC increased estimates for global demand in 2018 by 300,000 barrels a day to 98.45 million a day. Demand will expand next year by 1.5 million a day, or 1.6 percent.