OPEC trims 2016 outlook for its oil

OPEC expects lower demand for its oil in 2016 than it previously forecast.

The oil cartel's crude demand forecast was revised down by 100,000 barrels per day for the full-year, slightly lower than its estimate last month, according to a report released Monday.

"In 2016, demand for OPEC crude is expected to stand at 31.5 million barrels per day, 0.1 mb/d, lower than last month, and representing an increase of 1.8 mb/d over the previous year."

It said overall demand for oil, including sources outside OPEC, will increase by 1.25 million barrels per day, as it had said in February. However it mentioned that it considered some upward revisions to demand in "Other Asia, Asia-Pacific and Europe due to better-than-expected data."

However, OPEC sees "considerable uncertainty for 2016" in Europe. Possible economic improvements combined with low oil prices in Europe could continue to support demand in the region. OPEC explained that "unsolved budget deficits in several countries — and policies aimed at increasing fuel taxation — pose substantial downside risks."

It added that it lowered its demand forecast for Latin America and countries in the former Soviet Union on the "weaker-than-expected oil demand data and a slower economic outlook." In particular, OPEC said it now forecasts a "larger than expected contraction in 2016" for the economies of Brazil and Russia.

The oil cartel also continues to see strong demand in the U.S. on preliminary data in the first couple months of 2016. OPEC expects "strong growth in gasoline and jet fuel requirements that is more than offset by sluggish distillate demand (mainly as a result of the overall mild winter)."

According to its latest monthly report, the oil cartel still expects non-OPEC oil supply to decline by 700,000 barrels a day in 2016.