In its Monthly Oil Market Report for November, released Monday morning, the Organization of the Petroleum Exporting Countries (OPEC) noted that the cartel’s average price for its reference basket rose to $55.50 a barrel last month, its highest level in more than two-and-a-half years. Since June, the price has increased by just over $10 a barrel.
Global demand growth for 2017 was forecast to rise by 74,000 barrels a day more than last month’s forecast to 1.53 million barrels a day. The cartel’s projected demand growth for 2018 is now 1.51 million barrels a day, up by 131,000 barrels a day compared with the October estimate.
The cartel lowered its estimate of non-OPEC production for 2017, forecasting non-OPEC supply to decrease by 20,000 barrels a day and average 57.67 million barrels a day for the year. For 2018, non-OPEC supply is expected to rise by 870,000 barrels a day to an average of 58.54 million barrels. Essentially 100% of the increase is attributed to production from the United States.
2017’s estimated demand for OPEC crude rose to 33 million barrels a day, up by 710,000 barrels a day compared to 2016. Demand in 2018 is now estimated at 33.4 million barrels a day.
The cartel said OPEC production in October, as reported by secondary sources, fell by nearly 151,000 barrels a day to a daily average of 32.59 million barrels. Saudi Arabia’s October production rose to 10 million barrels a day, a month-over-month increase of 16,900 barrels a day.
The Saudis themselves reported total production of 10.056 million barrels a day in October, up by 82,500 barrels a day compared to September. Under the production cuts initiated in January, Saudi Arabia’s quota is 10.058 million barrels a day.
Crude prices rose slightly Monday morning, with West Texas Intermediate for December delivery trading up about 0.1% at $56.82. Brent crude for January delivery traded down about 0.3% at $63.34.