Crude oil prices were up on Monday, following word the Organization of the Petroleum Exporting Countries (OPEC) is predicting this year will see a higher-than-expected demand for oil produced by the cartel, at the expense of North American and other non-OPEC producers.
According to OPEC's latest Monthly Oil Market Report, global oil demand for this year is expected to rise by 1.17 million barrels per day, slightly higher than the previous report, mostly due to expectations of "an uptick in oil requirements" in the Americas.
Global oil prices have lost about half their value since last June, due in part to the North American shale oil and tar sands boom -- and OPEC says all that relatively cheap oil is driving demand.
"As prices drop, oil requirements are likely to respond positively," the report stated. "This time the sharp fall in prices has been mainly driven by excess supply. As a result, lower prices are likely to help to accelerate the pace of oil demand growth this time."
The report notes that "strong" U.S. oil production has also brought domestic inventories to an all-time high.
But while America's drivers have been benefiting from low prices at the pump, U.S. oil producers and the industries that depend on the oil and gas sector have been facing job cuts and the suspension of major projects, as the low oil prices cut into their bottom lines.
On Friday Baker Hughes (BHI), a Texas-based company that supplies services and products to the oil and natural gas industry, announced the average U.S. rig count for last month was down 199 from December 2014 -- and 86 lower compared to January of last year.
OPEC says it expects demand for its oil to average 29.21 million barrels per day (bpd) in 2015, up 400,000 barrels per day from its earlier assessment. In contrast, the cartel projects non-OPEC countries to produce 850,000 bpd, a drop of 420,000 bpd from its previous assessment -- mainly due to announced capital expenditure cuts this year by the international oil companies, as well as the drop in active North American drilling fields and volatile international geopolitics.
On the global oil markets, futures for the benchmark Brent oil jumped about one percent on Monday following, to $58.40 per barrel.
Reuters reports both Brent and its U.S. counterpart, West Texas Intermediate (WTI) have gained nearly 20 percent since late last month.