OPEC expects oil supply to fall by 2018 as the market recovers

​           The Organization of the Petroleum Exporting Countries (OPEC) said yesterday that demand for its crude oil will rise in 2018, asserting that its agreement to cut production with other producers reduces the surplus of oil stocks, which could lead to a potential shortage in the world market next year.
    The Organization of the Petroleum Exporting Countries (OPEC) also said in its monthly report that it had cut its estimate of supplies from other producers in 2018. "The use of oil will grow faster than previously thought given that the global economy is stronger than expected," Reuters said.
    OPEC confirmed that the world will need 33.42 million barrels per day of its oil next year, an increase of 360 thousand barrels per day than previously expected.
    "The drivers of global economic growth have continued to be widely effective, generating relatively strong momentum, and continued momentum may provide some minor potential."
    After the publication of the report "OPEC" prices of oil contracts, which are trading near the highest levels since 2015, the climb towards $ 64 a barrel. Crude prices are still around half of their levels in mid-2014, when the oil price bubble has pushed prices to collapse.
    "According to an assessment of secondary sources, crude production in October was below forecast demand in 2018 at 32.59 million bpd, down by about 150,000 bpd from September," the group said.
    The OPEC report said the commitment to cut output by 11 members exceeded 100 percent, up from 98 percent in September, according to Reuters calculations.
    "The high levels of compliance by OPEC and other producing countries have clearly played a key role in supporting stability in the oil market and putting it on a more sustainable path," the report said.
    The report notes that the market will see a deficit next year if OPEC continues to pump crude at October levels.
    "OPEC and non OPEC oil producers are moving towards a decision at their November 30 meeting on whether they will extend the global agreement to cut supplies after the end of March 2018," the ministers said yesterday.
    The Organization of the Petroleum Exporting Countries (OPEC), along with Russia and nine other producers, are cutting supply by 1.8 million bpd by the end of March in an effort to get rid of the supply gap and are considering extending the deal longer.
    Reuters said last month quoting OPEC sources that producers tend to extend the deal until the end of 2018, but adoption of the resolution may be delayed until early next year, according to market conditions.
    But Energy Minister Suhail bin Muhammed Al Mazroui said yesterday, "I do not think there is a need to postpone the decision until after the Vienna meeting, which will be held on 30 November.
    The Omani counterpart expressed confidence that there would be agreement this month.
    "He does not see the need to postpone the decision until March," Al Mazroui told an energy conference. "Producers will not meet in that quarter unless it is exceptional." "If there is a decision to extend the production cuts, it will be until the end of 2018." He said he did not think the producers would agree to deepen the cuts.
    Al Mazroui, whose country will take OPEC presidency next year, said that while the UAE was supporting the extension of production cuts, he could not say yet whether to support production cuts until the end of 2018.