Monthly Oil Market Report
2 3 ( &
14 March 2017
Assessment of the global economy
OPEC bulletin 3–4/17
Oil market rebalancing set to
further enhance petroleum industry
The rebalancing of the international oil market, driven by
the recent successful ‘Declaration of Cooperation’ reached
by OPEC and a group of non-OPEC producing countries, is
likely to further enhance the global oil industry, according
to the OPEC Secretariat in Vienna.
Monthly Oil Market Report (MOMR)
for March, it
said the ‘Declaration’, reached in December last year and
which came into effect on January 1, 2017, would lead to
even more global economic growth and hence higher oil
demand growth in 2017.
Under the terms of the decision made on December 10
in the Austrian capital, OPEC and the 11 non-OPEC produc-
ing countries have agreed to adjust their crude oil produc-
tion by a total of around 1.8 million barrels/day for the first
six months of 2017.
In a feature article on the assessment of the global
said that improvements in the world
economy that had started in the second half of 2016 were
likely to continue in 2017.
After estimated growth of three per cent in 2016, global
economic growth was expected to pick up in 2017 to reach
3.2 per cent.
The report noted that support was seen coming from
the OECD group of countries with growth of 1.9 per cent in
2017, compared to 1.7 per cent in the previous year.
GDP growth in China and India were forecast to slightly
decelerate, yet still remain strong.
“The stabilization of oil markets seen since the OPEC/
non-OPEC ‘Declaration of Cooperation’ has helped to sup-
port upstream capex spending and improve oil producers’
income, adding to global economic growth,” the
It said that higher-than-anticipated economic growth
may come from the United States and the Euro-zone, as
well as Japan to some extent.
Upside potential also existed in the emerging econo-
mies of China, India, Brazil and Russia.
However, it added that, at the same time, political and
economic uncertainties could hamper the global economy
from further and faster improvements, including upcom-
ing elections in major European economies, developments
regarding Brexit, and fiscal, monetary and trade policies.
observed that, in the US, labour market
improvements had continued to support the economy and
significantly lift consumer sentiment.
At the same time, industrial production had started to
pick up, while being supported by the recovery in oil prices.
In recent months, US domestic
consumption had turned out to be par-
ticularly supportive for the economy
and the return of investments in the
oil industry was expected.
“However, uncertainties regard-
ing both the consequences of new
economic programmes, as well as
the impact of the normalization
ofmonetary policies remain,” the
In this respect, said the
, upcoming budgetary
discussions, in combination
with the expiry of the debt-
ceiling suspension in mid-March,
would need close monitoring.
In the Euro-zone, the economic recovery continued,
supported by domestic improvements, but also by the
European Central Bank’s extraordinary monetary stimulus.
said that the ongoing weakness in the bank-
ing sector — including continuing sovereign debt-related
issues in Greece — may weigh on the region’s near-term
Meanwhile, Japan’s government-led stimulus had lifted
momentum, with most economic indicators pointing to the
upside. As a result, the country’s GDP was expected to rise
marginally in 2017.
said that, within the emerging and develop-
ing countries, growth trends were likely to vary once again
Brazil and Russia were expected to recover at different
levels from two years of recession, partly due to the lower
“Despite a somewhat slowing momentum, GDP growth
in both China and India is holding up well,” it stated.
The report added that the rise in commodity prices had
provided vital support to the economies of several devel-
“Meanwhile, the increase in commodity prices has
positively lifted inflation in the advanced economies to
healthier levels, providing major central banks some room
to normalize their monetary policies.
“Global trade is also likely to benefit from more stable
commodity prices in 2017,” the
M a r k e t R e v i e w