Demand for oil from the Organisation of Petroleum Exporting Countries (OPEC) would be higher than previously forecast, as the low oil price throttles production in the U.S., the cartel said on Monday in Vienna.
OPEC projected in its latest monthly market report on Monday in Vienna that non-OPEC countries would supply 57.1 million barrels per day (bpd) of oil on average this year, some 400,000 bpd less than predicted in January.
It cited the “declining number of active rigs in North America, a decrease in drilling permits in the U.S. and a reduction in the 2015 spending plans of international oil companies,” as some of the reasons for the downwards revision.
It said it also revised projected demand for its oil upward by 400,000 bpd to 29.2 million bpd.
The cartel said that at the current prices, pumping oil was no longer profitable for a number of producers in the U.S. and other countries, while several OPEC countries with lower production costs stood to gain market share.
The U.S. oil brand, West Texas Intermediate, raised to 53.23 dollars per barrel on Monday, while the European benchmark price for Brent also increased to 58.39 dollars, OPEC added.
It noted that in spite of the price increases seen since late January, oil still cost only about half of what it did in June.
On Tuesday, the International Energy Agency was expected to launch its Medium-Term Oil Market report for 2015 on trends and developments in the sector.
