OPEC has forecast that the world oil market will be more balanced in the second half of the year as outages in Nigeria and Canada help erode a supply glut that has weighed on prices more quickly than expected.
The Organisation of the Petroleum Exporting Countries in a monthly report said its production fell by 100,000 barrels per day (bpd) in May led by Nigeria. It maintained forecasts of seasonally higher demand for its crude in the second half of the year and falling supplies outside the group.
“The excess supply in the market is likely to ease over the coming quarters,” OPEC said in the report.
“Shutdowns in Nigeria and Canada tightened the oil market markedly and brought supply and demand more closely into alignment earlier than many had expected, bolstering prices.”
OPEC’s report points to a supply deficit of 160,000 bpd in the second half of 2016 if the group keeps pumping at May’s rate.
Excess supply in the first quarter was 2.59 million bpd, OPEC said.