The oil market should get a boost this summer from the “driving season,” the Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday, but added that demand from major economies would be insufficient to offset the decline in consumption elsewhere.
“Looking ahead, global products markets are once again expected to receive support from gasoline demand ahead of the driving season,” the body said in its monthly report.
“However, unlike in the previous year, OECD gasoil demand may not have sufficient strength to offset the continued slowdown in non-OECD consumption,” it added.
Crude remains in focus ahead of a flagship meeting at the weekend between oil-producing countries. Brent and WTI crude futures declined on Wednesday, following a more-than-4 percent jump during the previous session.
Crude oil futures surged around 20 percent in March. This was the best month since November 2015, OPEC said, and was largely based on expectations of supply intervention by major crude oil exporters.
OPEC added that hedge funds and other money managers had amassed a “near-record” number of bullish bets on increasing oil prices. That has helped push the main international benchmarks well above $40 per barrel.
The organization forecast global oil demand growth would be around 1.2 millions of barrels per day in 2016. This represented a minor downward revision of 50,000 barrels per day from previous expectations, mainly reflecting the slower economic momentum in Latin America.
Leading oil producers, including Saudi Arabia, will meet in Qatar at the weekend to discuss an output freeze to support oil prices.
Saudi Arabia’s oil minister ruled out an output cut on Wednesday, according to media reports.
“Forget about this topic,” he told the Saudi-owned al-Hayat newspaper, according to Reuters.