LONDON, June 10 (Reuters) – OPEC voiced confidence that excess supply in the oil market will ease as demand picks up and supply growth slows from producers outside the group, an indication its strategy of letting prices fall, reaffirmed at a meeting last week, is working.
In a monthly report, issued after OPEC’s June 5 decision to leave output policy unchanged, the group pointed to its expectations that supply from rival producers would decline in the second half of the year after rising in the first. World oil demand will grow faster than it did in 2014, OPEC said.
“The current oversupply in the market is likely to ease over the coming quarters,” OPEC’s in-house economists said in the report.
But the report also said production by members of the Organization of the Petroleum Exporting Countries in May rose by 24,000 barrels per day (bpd) based on figures from secondary sources, due to record output in top exporter Saudi Arabia and increases in Iraq and Angola.
If OPEC keeps pumping at May’s rate, the report indicates there will be an excess supply of 440,000 bpd in the second half of 2015, less than an average of 1.66 million bpd implied for the full year.
However, the full-year surplus is higher than the 1.52 million bpd implied by last month’s report.
(Reporting by Alex Lawler; Editing by Dale Hudson)