OPEC revises oil supply projections higher, Brent futures drop

The cartel for the world's largest oil producers kept its forecast for the rate of growth in oil demand for the backhalf of 2016 and 2017 unchanged.

Demand for crude oil was now seen rising by 1.23m barrels per day in 2016, making for just a marginal increase versus the Organisation for Petroleum Exporting Countries' previous projection.

World oil demand was still seen increasing by 1.15m b/d to an average of 95.42m b/d in 2017, OPEC said in its monthly oil market report, unchanged from the previous month's estimate.

"The main growth centres for next year continue to be India, China and the US," OPEC said.

However, the rate of growth in supplies from outside OPEC in 2016 was now pegged at -610,000 b/d, an upwards revision of 180,000 b/d versus the August MOMR.

The factors behind the revised supply projections were a lower-than-expected decline in US tight oil production, a stronger performance on the part of Norway and the early start-up of Kazhakstan's Kashagan field.

For 2017 non-OPEC supply was revised higher by 350,000 b/d to 0.20m b/d, with OPEC expecting it to average 56.62m b/d - mainly due to Kashagan.

OPEC production of non-gas liquids was seen rising by 150,000 b/d in 2017 to an average of 6.43m b/d.

Demand for OPEC's crude was seen at 31.7m b/d for 2016 and at 32.5m b/d in 2017, versus OPEC production of 33.24m b/d in August 2016.

As of 1232 BST front month Brent crude oil futures were trading 2.062% lower to $47.04 per barrel on the ICE.