The U.K.'s vote to leave the European Union poses risks to global economic growth and oil demand in Europe, OPEC said Tuesday.
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The Organization of the Petroleum Exporting Countries downgraded its forecast of global economic growth in 2017 to 3% from 3.1%, and said growth in the eurozone would slow to 1.2% instead of 1.5% in 2016.
The cartel didn't change its overall assessment of oil demand growth in 2017, forecasting new demand of 1.2 million barrels a day. That is the same as 2016 and around 300,000 barrels a day above the last 10 years' average.
But economic growth and demand for OPEC's main product--crude oil--are tied together.
European oil demand "faces substantial downside risks...as a result of uncertainties related to the region's economy, resulting from the U.K. referendum, among other challenges," the group's Vienna-based research department said in its monthly report.
OPEC, which controls more than a third of the world's oil supply, said production from countries outside the cartel will fall this year by 880,000 barrels a day from 2015 to 56.03 million barrels a day this year. The downward revision of 140,000 barrels a day was mainly because of lower output in Canada and the U.S.
Non-OPEC oil supply in 2017 is projected to decline by 110, 000 barrels a day, to average 55.92 million barrels a day, OPEC said.
OPEC now has 14 members since Gabon was added in June. Together, the group pumped 32.86 million barrels a day in June, 264,1000 barrels a day higher than a month earlier, primarily on higher production from Nigeria, Iran and Saudi Arabia.
The organization said it expects demand for its oil to reach 31.9 million barrels a day this year. For 2017, it expects oil demand to be 33 million barrels a day, 1.1 million barrels higher than in 2016.
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