OPEC Keeps Global Oil Demand Forecast Unchanged Demand will increase by 1.2 million barrels a day, according to Vienna-based group

By SUMMER SAID June 13, 2016 6:40 a.m. ET

The Organization of the Petroleum Exporting Countries kept forecasts for global oil supply and demand unchanged Monday after its members broke off a meeting earlier this month without reaching an agreement on oil output.

Global oil demand will increase by 1.2 million barrels a day this year to 94.18 million a day, led by India, the group’s Vienna-based research department said in the monthly report.

Non-OPEC production will fall by 740,000 barrels a day from 2015 to 56.4 million barrels a day this year. The downward revisions in Canada, Brazil and Colombia broadly offset upward revisions in the U.S., U.K., Russia and Azerbaijan.

OPEC forecast U.S. production this year will fall by 420,000 barrels a day from 2015 to 13.57 million barrels a day. Total U.S. output will decline by 150,000 barrels a day in the second half of this year compared with the first half as producers cut production that is become unprofitable with the low oil price environment.
OPEC broke off its meeting earlier this month in Vienna without reaching an agreement on oil output, continuing a hands-off policy that members say could set up a new test for the group’s relevance: shortages.

Until last December, OPEC had a production ceiling of 30 million barrels a day, a mark it routinely exceeded by more than two million barrels a day. Members decided against a return to such a cap, saying repeatedly that the market is rebalancing, and citing rising demand in the U.S., India and other major consumers as playing a major role in their decision.

OPEC’s 13 members pumped 32.36 million barrels a day in May, 100,1000 barrels a day lower than a month earlier mainly on production drops in Nigeria, Venezuela and Iraq, according to secondary sources such as shippers, analysts and industry executives.

The cartel’s kingpin Saudi Arabia saw its production last month rising to 10.24 million barrels a day from 10.157 million a month earlier, according to OPEC sources.

The organization, which pumps about a third of the world’s crude, said it expects demand for its oil this year to reach 31.5 million barrels a day.