OPEC members have agreed to closely monitor developments regarding oil production in the coming months after failing to set an output ceiling at its last meeting.
At its 168th meeting in Vienna, Austria, members noted that since the last meeting in June, oil and product stock levels in the OECD have continued to rise. Latest figures see OECD and non-OECD inventories sitting well above the five-year average.
Upon reviewing the oil market outlook for 2015, and the projections for 2016, it was noted that global economic growth is currently at 3.1% in 2015 and is forecast to e4xpand by 3.4% next year. Regarding supply and demand, it was also noted that non-OPEC supply is expected to contract in 2016, while global demand is anticipated to grow again by 1.3 million barrels per day.
Ahead of the meeting on December 4, Wood Mackenzie, an energy intelligence company, said that 2014/15 was characterized by oil supply significantly outstripping demand thus adding to global storage and dramatic capital spending cuts by non-OPEC producers.
Looking ahead, 2016/17 shows a reversal where demand growth outstrips the increases in total world oil supply. This could lead to inventory draws in the second half of 2016 and a moderate price recovery.