OPEC said on Monday it expects demand for oil to grow faster than it originally expected in 2018, but the organization also sees supplies from beyond the producer group surging this year, driven by rising U.S. output.
A monthly report also showed OPEC’s production was little changed in January as the group continues to limit its output for a second year in order to balance an oversupplied market. However, key members like Iraq raised their output in January.
The 14-member cartel said it now sees non-OPEC production growing by 1.4 million barrels a day, up 250,000 barrels a day from its estimate in its last monthly report. It expects nations outside of OPEC to pump a total of 59.26 million barrels a day this year, 320,000 barrels a day higher than its last forecast.
The United States accounts for more than half of that upward revision. OPEC raised its 2018 U.S. supply growth forecast by 150,000 barrels a day.
Recent U.S. government data showed that American drillers began pumping more than 10 million barrels of crude oil a day in November, more than top OPEC producer Saudi Arabia.
“According to the most recent assessment, the steady oil price recovery since summer 2017 and renewed interest in growth opportunities has led to oil majors catching up in terms of exploration activity this year, both in the shale industry and offshore deep water,” OPEC said.
