OPEC still has to show the market more crude oil barrels if it wants to avoid a supply squeeze later this year, the producer group's own analysis shows.
In its closely watched monthly oil market report, OPEC's analysis arm forecast global demand for OPEC's crude at 33.40 million barrels per day for both the third and fourth quarters of 2018.
That is 1.08 MMbbl/d more than the bloc's July production level, as assessed by the independent secondary sources used by OPEC to track member output.
But any market tightness will ease in 2019, OPEC forecast, as growth in non-OPEC supplies will far outpace the projected increase in global demand, dropping the so-called call on OPEC crude back down to 32.05 MMbbl/d for the year.
The report warned, however, that "if any unexpected supply outages should occur due to natural disasters/technical shortcomings and these coincide with any geopolitical supply disruption, it could bring the market into an imbalanced situation," adding that industry investment had yet to recover to levels seen before the 2014 price crash.
As for the U.S.-China trade dispute, OPEC said its analysis of probable outcomes indicates that "tariffs under the most likely case will not have a significant impact on global GDP or oil demand growth in 2018 and 2019."
Still, OPEC nudged downward its forecasts of year-on-year oil demand growth for both 2018 and 2019, while raising its projections of year-on-year non-OPEC supply growth.
World demand will average 98.83 MMbbl/d in 2018, rising to 100.26 MMbbl/d in 2019, OPEC said.
Non-OPEC supply will average 59.62 MMbbl/d in 2018 and 61.75 MMbbl/d in 2019, with the U.S., Brazil and Canada contributing most of the growth.
Organisation for Economic Co-operation and Development commercial oil inventories stood at 2.822 billion barrels as of June, 33 million barrels below the five-year average but 251 million barrels above the January 2014 level, OPEC said.
OPEC and 10 non-OPEC partners agreed on June 23 to boost output by 1 MMbbl/d by reducing over-compliance with cuts that had been in place since January 2017. The move is intended to alleviate any shortages caused by the reimposition of U.S. sanctions on Iran in November and Venezuela's continuing collapse.
OPEC produced 32.32 MMbbl/d in July, according to secondary sources, up 40,000 barrels per day from June.
Saudi Arabia, OPEC's largest producer, has declared it would take on the bulk of the increase, but instead cut production by 50,000 bbl/d from June to 10.39 MMbbl/d, secondary sources estimated. The kingdom self-reported an even larger drop of 200,000 bbl/d to 10.29 MMbbl/d.
Second-largest producer Iraq boosted its output 20,000 bbl/d to 4.56 MMbbl/d, according to secondary sources, though it self-reported production of 4.46 MMbbl/d.
Iran saw its production drop 50,000 bbl/d to 3.74 MMbbl/d in July, secondary sources estimated, though it self-reported steady production of 3.81 MMbbl/d.
Kuwait was the biggest gainer in the month, boosting production 80,000 bbl/d to 2.79 MMbbl/d, while Nigeria (70,000 bbl/d) and the United Arab Emirates (70,000 bbl/d) also saw significant gains, according to secondary sources.
Strife-torn Libya's production dropped 60,000 bbl/d to 660,000 bbl/d, while Venezuela, in the throes of an economic, political, labor and humanitarian crisis, slumped 50,000 bbl/d to 1.28 MMbbl/d, according to secondary sources.
Herman Wang is a reporter at S&P Global Platts, which like S&P Global Market Intelligence is a unit of S&P Global Inc.