Global oil demand is set to rise this year as production growth is lower than previously expected, the U.S. Energy Information Administration said.
The administration said in its short-term energy outlook that the widening supply deficit will further draw oil from global inventories, pushing Brent crude prices back above $80 a barrel in the spot market this month.
The administration expected global oil demand to average about 103.1 million barrels per day this year, an increase of about 200,000 barrels per day from its previous forecast of 102.9 million barrels per day.
Global production is now expected to average 102.2 million barrels per day, down from a previous forecast of 102.4 million barrels per day after OPEC postponed its plan to increase output, it said.
The OPEC+ alliance had planned to increase production starting in October, but with crude prices falling amid a weak global economy, they postponed their plan last week and will increase production starting in December.
OPEC on Tuesday cut its forecast for growth in demand for crude oil this year to about 2 million barrels per day, which is still double the current estimate of the US Energy Information Administration for growth of about 1 million barrels per day.
The Energy Information Administration forecasts that global oil demand will exceed production by about 0.9 million barrels per day this year, compared to a gap of 0.5 million barrels per day in its previous forecast.
The administration said that despite growing market concerns about economic growth and growth in oil demand, especially in China, which caused oil prices to fall, OPEC Plus production cuts mean less global oil production compared to consumption.
