I can’t resist: It’s the classic good news/bad news set up.
Good news for oil prices: OPEC raised its forecast for global oil demand in 2021 by 2.3 million barrels a day above last year’s projection. It also raised its oil demand forecast in 2040 by 1.7 million barrels a day to about 11 million barrels.
Bad news for oil prices: OPEC also forecast that oil output from North American shale producers will hit 7.5 million barrels a day in 2021. That’s 56% higher than OPEC’s forecast of a year ago. Higher oil prices resulting from OPECs production cuts have led to a revival in North American oil production. For 2017 OPEC now forecasts North American shale production at 5.1 million barrels a day, a 25% increase from last year’s projection.
OPEC also predicts that oil shale output will peak in 2025–which also leads to the group’s forecast that demand for OPEC oil will remain essentially unchanged until then.
OPEC meets on November 30 to decide, among other issues, whether to extend and/or deepen its current production cuts.