OPEC sees higher 2018 oil demand, trims output

OPEC sees higher 2018 oil demand, trims output

OPEC on Tuesday forecast higher demand for its oil in 2018 and pointed to signs of a tighter global market, indicating its production-cutting deal with non-member countries is helping to tackle a supply glut that has weighed on prices, Reuters reports.

In a monthly report, the Organization of the Petroleum Exporting Countries said the world would need 32.83 million barrels per day (bpd) of OPEC crude next year, up 410,000 bpd from its previous forecast.

OPEC said inventories were falling and that an increase in the price of Brent crude for immediate delivery to a premium to that for later supplies, known as backwardation, raised hopes that a long-awaited rebalancing of the market is under way.

“This is due to the shooting up of demand for prompt-loading barrels and amid increasing sentiment that the oil market will rebalance over the next year with a major drawdown in crude and product stocks,” OPEC said in the report.

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