In a monthly report, the Organization of the Petroleum Exporting
Countries (OPEC) said the market could find support in winter
from low distillate fuel stocks and forecasts of colder weather,
which would boost distillates demand for heating
OPEC said the world would need 33.06 million barrels per day
(bpd) of its crude next year, up 230,000 bpd from its previous
forecast. That is its third consecutive monthly increase in the
projection from its first estimate made in July.
The report illustrates the growing confidence of OPEC officials
that its supply cut is working. Oil <LCOc1> has found support
from the deal but, trading below $57 a barrel on Wednesday,
crude is still half its mid-2014 level.
"With the market moving into the winter season, distillate fuel
supplies are notably tight, representing a change from the
excess supplies seen in the last two years," OPEC said in the
report.
"OPEC and key non-OPEC oil producers continue to successfully
drain the oil market of excess barrels."
In a deal aimed at clearing the glut, OPEC is curbing output by
about 1.2 million bpd, while Russia and other non-OPEC producers
are cutting half as much, until March 2018.
The 14-country producer group said its oil output in September,
as assessed by secondary sources, came in below the demand
forecast, even though output climbed slightly.
The figures mean OPEC has complied 98 percent with the cutback
pledge, according to a Reuters calculation, up from 83 percent
initially reported in August as the September rise was led by
Nigeria and Libya which are exempt from the cut.
OPEC said it pumped 32.75 million bpd in September, up about
89,000 bpd from August. Should OPEC keep pumping at similar
levels to September, the market could move into a deficit next
year, the report indicates.
In a further sign that the supply excess is easing, OPEC said
inventories in developed economies declined by 24.7 million
barrels in August to 2.996 billion barrels, 171 million barrels
above the five-year average.
(Reporting by Alex Lawler; editing by Jason Neely/Keith Weir)
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