OPEC on Tuesday raised its forecast of oil supplies from non-member countries in 2015, a sign that oil's price collapse is taking longer to impact on shale and other competing sources than previously thought.
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In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) said it expected no extra demand for its crude oil this year despite faster global growth in consumption, because of higher-than-expected production from the United States and other countries outside the group.
Since last year, OPEC has refused to cut its output despite the price rout, seeking to recover market share by slowing higher-cost production in the United States and elsewhere that had been encouraged by OPEC's previous policy of keeping prices high at around $100 a barrel.
Earlier this year, OPEC slashed its prediction of non-OPEC supply for 2015, expecting lower prices to lead to a slowdown. But on Tuesday, OPEC raised the forecast by about 90,000 barrels per day (bpd), following an increase in July.
"U.S. onshore production from unconventional sources is currently expected to decline marginally in the second half of 2015 through year-end, while U.S. offshore production is expected to grow due to project start-ups," OPEC said.
"Recent developments in the upstream as well as renewed oil price volatility have made forecasting non-OPEC supply more challenging."
The report also showed that OPEC members continue to boost supplies. According to secondary sources cited by the report, OPEC produced 30.51 million bpd in July - 1.5 million bpd more than its 30-million-bpd target.
With OPEC forecasting demand for its crude will average 29.23 million bpd in 2015 - steady from last month - the report points to a 2.28-million-bpd supply surplus in the market if the group keeps pumping at July's rate.
But Saudi Arabia, the driving force behind's OPEC's refusal to cut output, told OPEC it trimmed production by 200,000 bpd to 10.36 million bpd in July, down from June's record rate.
OPEC still sees a sizeable slowdown in supply growth from non-OPEC next year and stuck to its view that rising demand would erode the surplus in the market.
"Crude oil demand in the coming months should continue to improve and, thus, gradually reduce the imbalance in oil supply-demand fundamentals," it said. (Editing by Dale Hudson)