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OPEC bulletin 12/17–1/18

MOMR … oil market highlights

December 2017

M a r k e t R e v i e w


OPEC Reference Basket

surged near ten

per cent to $60.74/barrel in November, its

highest since June 2015. Crude futures pric-

es improved further to levels not seen since

summer 2015. Continuing bullish oil market

fundamentals and optimism that OPEC and

non-OPEC would extend the production ad-

justment which would support the oil market

over November. ICE Brent averaged $5.22

higher, at $62.87/b, while NYMEX WTI in-

creased $5.07 to $56.66/b. The ICE Brent/

NYMEX WTI spread widened to $6.20/b.

Money managers raised net long position in

ICE Brent and NYMEX WTI futures and op-

tions to 934,463 contracts. Brent and Dubai

remained in backwardation, while the WTI

contango eased.


global GDP growth

forecast remains at

3.7per cent for both2017and2018. USgrowth

was revised up in both 2017 and 2018 to 2.3

per cent and 2.5 per cent respectively. Growth

in theEuro-zone remains unchangedat 2.3per

cent in 2017 and 2.1 per cent in 2018. Japan’s

growth in 2017 remains unchanged at 1.6

per cent, while 2018 expectations have been

lifted to 1.4 per cent. India’s soft 3Q17 GDP

growth led to a downward revision to 2017

GDP from 6.8 per cent to 6.5 per cent, while

growth in 2018 remains unchanged at 7.4 per

cent. China is seen growing at 6.8 per cent in

2017 and 6.5 per cent in 2018.

Global oil demand

is projected to grow at

around 1.53m b/d in 2017, in line with last

month’s forecast. China is projected to lead

oil demand growth in the non-OECD, followed

by Other Asia — which includes India — and

OECD Americas. In 2018, world oil demand

is expected to grow by 1.51m b/d. OECD will

contribute positively to oil demand growth,

adding some 280,000 b/d, whereas the bulk

of the growth will come from the non-OECD

with 1.23m b/d of potential growth.


oil supply

growth for 2017 now

stands at 810,000 b/d, representing an up-

ward revision of 150,000 b/d from the pre-

vious report. For 2018, the forecast for non-

OPEC supply growth has been revised up by

120,000 b/d to now stand at 990,000 b/d.

The 2018 forecast for non-OPEC supply is

associated with considerable uncertainties,

particularly regarding US tight oil develop-

ments. US oil supply is now expected to grow

by 1.05m b/d next year, representing an up-

ward revision of 180,000 b/d and following

growth of 610,000 b/d in 2017. OPEC NGLs

and non-conventional liquids are expected to

increase by 180,000 b/d in 2018, compared

to 170,000 b/d this year. In November, OPEC

crude production decreased by 133 tb/d, ac-

cording to secondary sources, to average

32.45m b/d.


in theAtlanticBasin showed

positive performance during November. In

the US, higher export opportunities amid un-

expected refinery outages product markets

provided support. Product markets in Europe


domestic gasoline demand, despiteweakness

in the middle of the barrel amid large diesel

import volumes. In Asia, product markets

showed marginal weakening, as lower mid-

dle and bottom of the barrel demand offset

the positive contribution from firm regional

gasoline consumption.


spot freight rates for dirty vessels

were mostly stable in November, maintain-

ing the gains achieved a month earlier and

supported by seasonal tonnage demand.

VLCC and Suezmax freight rates were flat

m-o-m. Meanwhile, Aframax freight rates

declined, mainly on the back of weak rates

in the Mediterranean, which also exhibit-

ed a decline in clean tankers spot freight

rates in November as market activities

were limited.

Total OECD commercial

oil stocks

fell in

October to stand at 2,948m b. At this level,

OECD commercial oil stocks are 137mb above

the latest five-year average. Crude and prod-

ucts stocks indicate a surplus of around 110m

b and 27m b above the seasonal norm, re-

spectively. In terms of days of forward cover,

OECD commercial stocks stand at 62.1 days in

October, some 1.8 days higher than the latest

five-year average.

Based on the current global

oil supply/

demand balance

, OPEC crude in 2017 is esti-

mated to stand at 32.8m b/d, some 600,000

b/d higher than the 2016 level. In 2018, OPEC

crude is forecast at 33.2m b/d, an increase of

around 300,000 b/d over the 2017 level.

The feature article and oil market highlights are taken from OPEC’s Monthly Oil Market Report (MOMR) for December 2017. Published by

the Secretariat’s Petroleum Studies Department, the publication may be downloaded in PDF format from our Website



provided OPEC is credited as the source for any usage. The additional graphs and tables on the following pages reflect the latest data on

OPEC Reference Basket and crude and oil product prices in general.