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OPEC sees strong oil market, possible need for more output

Vienna - Global oil demand is set to stay strong in the second half of 2018, an OPEC technical panel forecast this week, suggesting the market could absorb extra production from the group. OPEC’s de facto leader, Saudi Arabia has proposed gradually relaxing production cuts

Vienna - Global oil demand is set to stay strong in the second half of 2018, an OPEC technical panel forecast this week, suggesting the market could absorb extra production from the group.

The Organization of the Petroleum Exporting Countries meets on Friday to decide output policy amid calls from major consumers such as the United States and China to cool down oil prices and support the global economy by producing more crude.

OPEC’s de facto leader, Saudi Arabia, and non-member Russia have proposed gradually relaxing production cuts - in place since the start of 2017 - while OPEC members Iran, Iraq, Venezuela and Algeria have opposed such a move.

Three OPEC sources told Reuters a technical panel - the organization’s economic commission - met on Monday to review the market outlook and present it to member countries’ oil ministers later in the week.

“If OPEC and its allies continue to produce at May levels then the market could be in deficit for the next six months,” one of the sources said. Another source said: “The market outlook in the second half is strong.” Some countries including Algeria, Iran and Venezuela said at the panel meeting that they still opposed an output increase, one of the sources said.

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