Market and product

The Organisation of Petroleum Exporting Countries (OPEC) on Thursday estimated a contraction of 380,000 barrels per day (bbl/d) in non-OPEC supply which is set to average 57.14m bbl/d in 2016, a downward revision of 250,000 bbl/d from its previous estimate.

OPEC's decision to battle for market share by abandoning its longstanding policy of cutting production to control prices seems to be taking a toll on non-OPEC production, while supporting the producers' group.

OPEC expects to sell more crude in 2016 than it did this year, partly because of the contraction in its competitors' output. Total demand for its crude is expected at 30.8m bbl/d, which accounts for an increase of 1.5m bbl/d over the estimated level for 2015.

Nonetheless, non-OPEC Canada and Brazil are set for growth next year.

"Growth is seen coming mainly from Canada and Brazil, with declines also expected in the US, Mexico, Russia, Kazakhstan, the UK and Azerbaijan," OPEC said in its December Monthly Oil Market Report.

"For 2016, global oil demand growth is expected to increase by around 1.25 mb/d, unchanged from the previous report, averaging 94.13 mb/d," OPEC said.

At the last OPEC conference held on 4 December in Vienna, the producer group omitted to announce a ceiling on its production levels, sending the futures markets spiralling downward with Brent trading below $40/bbl for the first time since February 2009.

The organisation's production - according to secondary sources - rose by 230,000 bbl/d from the previous month to average 31.70m bbl/d, OPEC said in the report.

"Crude oil output increased mostly in Iraq, by around 248 tb/d, to average 4.3 mb/d," OPEC said on November.