OPEC cut its 2015 demand forecast to its lowest level in 12 years as U.S. shale production surges and global economic growth slows.
The 12 member group slashed its forecast by about 300,000 barrels to 28.9 million barrels per day, the lowest level since 2003.
The new forecast is about 1.5 million bpd less than OPEC members produced in November and about 2 million bpd shy of the production target set at last month’s OPEC meeting.
The group said the impact of falling prices on crude supply and demand is still unclear.
“The downward revision reflects the upward adjustment of non-OPEC supply as well as the downward revision in global demand,” OPEC said.
OPEC’s total output dropped by 390,000 bpd in November to 30.5 million bpd as production in Libya fell by 248,000 bpd.
Production in Libya has been disrupted by political unrest including the seizure of the El Sharara oil field, the largest producing field in the country, by armed gunmen in early November.
Algeria, Angola, Kuwait, Qatar, the United Arab Emirates and Saudi Arabia also saw output declines.
Production from non-OPEC members is expected to climb by about 1.72 million bpd in 2014 on the strength of North American unconventional drilling projects.
Total oil inventories in the world’s largest economies held at 2.7 billion barrels, about 15 million barrels higher than the five year average.