Based on its Monthly Oil Market Report for April, released Thursday morning, the Organization of the Petroleum Exporting Countries (OPEC) noted that the cartel’s average price for its reference basket rose by less than 0.5% to $63.76 a barrel in the month but remains higher than in the past two years. Year to date, OPEC’s reference basket is up 24.6% ($12.80 per barrel) compared to the same period in 2017.
Global demand is forecast to average 97.07 million barrels a day in 2017, up 30,000 barrels from last month’s estimate. The current estimate for 2018 global demand is 98.63 million barrels a day, up by 60,000 from the prior month’s estimate.
Global demand growth for 2017 was forecast at 1.65 million barrels a day, up by 30,000 from the prior month’s estimate. The cartel’s projected demand growth for 2018 is now 1.63 million barrels a day, also up by 30,000 barrels since last month’s report.
The cartel estimated 2017 non-OPEC supply grew by 30,000 barrels a day to 57.9 million. For 2018 non-OPEC supply is expected to rise by 1.89 million barrels a day to an average of 59.61 million, an increase of 38,000 barrels a day compared with last month’s estimate.
U.S. production growth in 2018 is now expected to rise by 1.5 million barrels a day, up by 40,000 barrels from last month’s forecast. This number remains particularly worrisome to the cartel because it shows no signs of either stabilizing or falling.
2017’s estimated demand for OPEC crude was unchanged at 32.9 million barrels a day, up by some 600,000 compared to 2016. Demand in 2018 is now estimated at 32.6 million barrels a day, down by 300,000 from the 2017 level and unchanged compared to last month’s estimate.
The cartel said OPEC production in March, as reported by secondary sources, fell month over month by 201,000 barrels a day to a daily average of 31.96 million barrels. Saudi Arabia’s March production fell to 9.934 million barrels a day, a month-over-month decrease of about 47,000.
The Saudis themselves reported total production of 9.907 million barrels a day in March, about 28,000 fewer compared to February. Under the production cuts initiated in January, Saudi Arabia’s quota is 10.058 million barrels a day.
Crude prices are higher Thursday morning, with WTI for May delivery trading down about 0.2% at $66.70. Brent crude for June delivery traded down about 0.4% at $71.81.