[LONDON] Opec forecast on Monday that demand for its oil in 2016 would be much higher than previously thought as its strategy of letting prices fall hits US shale oil and other rival supplies, reducing a global surplus.
In a monthly report, the Organization of the Petroleum Exporting Countries (Opec) forecast the world would need 30.82 million barrels per day (bpd) from the group next year, up 510,000 bpd from the previous prediction.
Supply outside Opec is expected to decline by 130,000 bpd in 2016, the report said, as output falls in the United States, the former Soviet Union, Africa, the Middle East and much of Europe. Last month, Opec predicted growth of 160,000 bpd. "This should reduce the excess supply in the market and lead to higher demand for Opec crude," Opec said in the report,"resulting in more balanced oil market fundamentals".
The higher call on Opec comes despite weaker global demand growth overall. Opec trimmed its estimate of 2016 world oil demand growth by 40,000 bpd to 1.25 million bpd, citing slower growth in China.