Crude oil demand will increase globally this year while non-OPEC supply is expected to rise more than expected over the next year, the Organization of the Petroleum Exporting Countries and Russia stated in its monthly report released Thursday.
The organization said non-OPEC supply growth for 2018 was forecast by an additional 80,000 barrels per day (bpd) to 1.71 million barrels per day. The increase is driven largely by higher-than-expected first quarter growth in the U.S.
Meanwhile, the forecast for global oil demand was increased by 30,000 bpd to 1.63 million bpd.
“This mainly reflects the positive momentum in the OECD in the 1Q18 on the back of better-than-expected data, and supported by development in industrial activities, colder-than-anticipated weather and strong mining activities in the OECD Americas and the OECD Asia Pacific,” OPEC said in its monthly market report.
The price of oil has been caught between a supply agreement by OPEC and the rise in U.S. crude. The U.S. overtook Saudi Arabia as the biggest oil producer in January. Investors worry that the rise in U.S. crude could dampen the efforts made by OPEC to end a supply glut.
OPEC agreed in December to cut oil output by 1.8 million bpd until the end of 2018. The agreement was due to end in March 2018, having already been extended once.
Total production of OPEC countries was 31.96 million pbd in March, a fall of 201,000 bpd. Saudi Arabia crude oil production decreased to 9.907 million bpd.
After the report, U.S. West Texas Intermediate (WTI) crude futures fell 0.64% to $66.39 a barrel by 7:59 AM ET (11:59 GMT).
Brent crude futures, the benchmark for oil prices outside the U.S., decreased 58 cents, or 0.80%, to $71.48 a barrel.