OPEC sticks to global oil demand forecasts for 2016

The Organisation of the Petroleum Exporting Countries stuck to an optimistic note on global oil demand in 2016, despite the recent decision by the World Bank to slash its projections for global growth.

In its Monthly Oil Market Report, OPEC forecast world economic growth would come in at 3.1% for 2016, following an expansion of 1.9% in the year before, with both estimates unchanged from those contained in the previous such report.

Economic growth projections for China and India this year were kept at 6.5% and 7.5%, respectively.

However, that also meant that Brazil and Russia were still expected to see a contraction of 3.4% and 1.1%, respectively.

World oil demand was still seen increasing by 1.20m barrels per day in 2016 to reach 94.18m b/d, led by demand from countries such as India. By types of energy categories, healthy vehicle sales and the low oil price environment were expected to stoke demand for transportation fuels.

Supplies from outside OPEC were still seen shrinking by 740,000 barrels per day to reach an average of 56.40m b/d, after having risen by 1.47m b/d in 2015. Esimates for higher output from the US, UK, Russia and Azerbaijan were offset by downward revisions to projections from Canada, Brazil and Colombia.

Commercial oil stocks in the OECD region stood at 3,046mb in April, according to OPEC, equivalent to 66.4 days of so-called 'forward cover'.

Estimated demand for OPEC crude in 2016 at 31.5m b/d was also unchanged versus the previous MOMR and 1.8m b/d higher than last year.