In 2017, world oil demand growth is forecast at 1.15 mb/d to average 95.56 mb/d, according to OPEC Monthly Oil Market Report.

''World oil demand growth is estimated at 1.24 mb/d in 2016 supported by the transportation sector, reflecting low retail prices and better-than-anticipated vehicle sales. In the non-OECD, Other Asia and China saw solid-to-steady oil demand growth. In Latin America and the Middle East, oil requirements were lower than initial projections as slower economic developments and a high level of substitution dampened oil consumption. In 2017, world oil demand is projected to grow by 1.15 mb/d,'' the report said.

In OECD, it added, oil demand is projected to rise in OECD Americas, flatten in Europe and continue declining in Asia Pacific. In non-OECD, improvement in economic activities is assumed to provide support to oil demand growth, particularly in Latin America and the Middle East.

''Non-OPEC oil supply in 2016 is estimated to contract by 0.78 mb/d. The main contributors to this decline are the US, China, Mexico, Colombia and other OECD Europe, while growth is anticipated to come from Russia, Brazil, Congo and the UK. Low oil prices led to a decline of 420 tb/d in US oil production. Declines are also seen coming from Colombia and China, as well as Canadian conventional crude output,'' it indicated.

In 2017, non-OPEC oil supply is projected to grow by 0.3 mb/d, despite initial projections in July 2016 for a contraction (Graph 2). This is mainly due to higher price expectations for 2017. The main contributors to non-OPEC supply growth are Brazil with 0.25 mb/d, Kazakhstan with 0.21 mb/d, and Canada with 0.17 mb/d. In contrast, Mexico, US, China, Colombia, and Azerbaijan are expected to show the main declines.

''However, this forecast remains subject to a number of uncertainties, including the pace of economic growth, potential new policies and price developments,'' it noted.

''Based on the above forecasts, the demand for OPEC crude in 2017 is expected to stand at 32.6 mb/d, which is slightly higher than the 32.5 mb/d level referred to in the most recent OPEC Ministerial Conference. This, combined with the joint cooperation with a number of non-OPEC countries in adjusting production by around 0.6 mb/d, will accelerate the reduction of global inventories and bring forward the rebalancing of the oil market to the second half of 2017,'' the report said.