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However, the Organization of the Petroleum Exporting Countries
in a monthly report also cut its forecast for world economic
growth this year, citing increased uncertainty following
Britain's vote to leave the EU and said the pace of oil demand
growth would slow slightly next year, in its first 2017
forecast.
"After the UK's referendum to leave the EU, economic uncertainty
has increased," OPEC said in the report. "Potential negative
effects have led to a downward revision of global economic
growth in 2016 to 3.0 percent from 3.1 percent."
Other forecasters including the International Monetary Fund have
cut economic growth outlooks following the UK referendum.
Concern about the economic impact of Brexit has weighed on oil
prices, which at $47 a barrel <LCOc1> have fallen from a 2016
high close to $53 in early June.
World oil demand will rise by 1.15 million barrels per day (bpd)
in 2017, OPEC said, its first forecast for next year in the
monthly report. That marks a slight slowdown from growth of 1.19
million bpd expected in 2016.
Oil prices have halved from two years ago in a drop that
deepened after OPEC refused in late 2014 to cut output to
support prices, hoping that cheaper oil would curb higher-cost
rival supply such as U.S. shale.
Despite Brexit, OPEC's 2017 market outlook suggests the strategy
is working as it expects supply outside the group to fall
further and demand for its own crude to rise, tipping the global
market into a slight deficit.
"The contraction seen this year in non-OPEC supply is expected
to continue in 2017 but at a slower pace," OPEC said. "Market
conditions will help remove overall excess oil stocks in 2017."
(Reporting by Alex Lawler; Editing by Susan Fenton and William
Hardy)
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