The Organisation of Petroleum Exporting Countries (OPEC) has said the demand for crude oil is expected to rise this year, boosting prices of the product in the international market.
The oil cartel made this known in its monthly oil market report released on its website on Monday.
OPEC forecasts that demand for its oil will average 29.21 million barrels per day in 2015, up by 430,000 bpd from its previous forecast.
It also slashed its forecast for the rate of growth in non-OPEC supply, citing a slowdown in the United States shale oil boom and lower capital investment by energy firms.
Brent crude prices rose above $58 a barrel on Monday after OPEC forecast that demand for its oil would be greater than expected this year.
Oil demand and Gross Domestic Product growth in Nigeria and other African countries’ supply increased by 10,000 barrels per day year-on-year to average 2.41mb/d in 2014.
On a quarterly basis in 2015, total oil supply from Africa is expected to average 2.44mb/d, 2.41mb/d, 2.40mb/d and 2.39mb/d, respectively in the first, second, third and fourth quarters, according to OPEC.
The oil demand outlook for this year is currently anticipated to rise by 1.17mb/d; however, developments need to be monitored closely, particularly following the sharp drop in crude prices seen in recent months, it said.
As prices drop, the cartel said oil requirements were likely to respond positively “although this can be impacted by other factors. For example, in 2008, prices fell sharply, starting in the summer with the onset of the financial crisis and the global economic recession, which also led to a deterioration in demand.”
It added, “This time, the sharp fall in prices has been mainly driven by excess supply.
“As a result, lower prices are likely to help to accelerate the pace of oil demand growth this time. Other factors can also impact the degree to which any acceleration in demand takes place.”
In addition to economic growth, the organisation said the adoption of energy policies and regulations could also influence oil requirements greatly, adding, “These factors tend to vary considerably from one economy to another and, as a result, their impact will also differ.
“A review of oil demand patterns going into 2015 bears this out. Preliminary data for the US oil demand shows a continuation of the positive momentum started in Q4 2014. Gasoline (petrol), in particular, remains a key driver behind the growth in the US oil demand, largely a result of lower oil prices. Gasoline pump prices in the US currently average $2.07/gallon, down $1.22/gallon from a year earlier.
“Preliminary data for January shows another significant rise in gasoline demand of 0.70mb/d, continuing the general positive trend seen in the previous three months. Over this period, middle distillates have largely experienced the opposite trend, with preliminary data showing year-on-year growth falling for two-consecutive months.
“Overall, US oil consumption has seen a noticeable rise and is expected to stay firm in the near term amid lower oil prices and as economic activities improve. US oil demand growth is forecast to be around 0.18mb/d and could see further upward revisions as the situation continues to improve.”
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