Key Takeaways
- OPEC has significantly raised its forecast for global oil demand growth in 2026 to 1.38 million barrels per day (bpd) while trimming its non-OPEC+ supply growth prediction for the same year to 630,000 bpd, signaling a tighter market outlook.
- OPEC+ crude output saw a substantial increase in July, rising by 335,000 bpd from June to average 41.94 million bpd, following a recent output hike; OPEC's own crude production also rose by 263,000 bpd to 27.54 million bpd.
- OPEC now projects a lower growth in U.S. liquids output next year, with an expected increase of just 130,000 bpd, a significant downgrade from earlier forecasts, making Brazil the largest source of non-OPEC+ output expansion.
- European Central Bank (ECB) Governing Council member Joachim Nagel stated that interest rates are at a "very good level" and inflation is no longer a major challenge, though he cautioned against excessive optimism and emphasized a "steady hand" amid tariff uncertainty.
- Brazil's mid-month inflation (IPCA-15) for July accelerated to 0.33% month-over-month, while the annual rate edged up to 5.30%, remaining above the central bank's target.
The Organization of the Petroleum Exporting Countries (OPEC) released its latest Monthly Oil Market Report (MOMR) today, revealing significant adjustments to its 2026 global oil market outlook. The cartel increased its forecast for global oil demand growth in 2026 by 100,000 bpd to 1.38 million bpd, bringing total demand to 106.52 million bpd. This upward revision reflects stronger expectations for consumption across the U.S., Europe, the Middle East, and Africa. The forecast for global oil demand growth in 2025 remains unchanged at 1.29 million bpd, with total consumption seen at 105.14 million bpd.
Simultaneously, OPEC has trimmed its 2026 forecast for non-OPEC+ supply growth by 100,000 bpd to 630,000 bpd. A key factor in this adjustment is a downgraded outlook for U.S. tight oil output. OPEC now expects U.S. liquids output to rise by only 130,000 bpd next year, an 80,000 bpd reduction from last month's report and significantly lower than the 510,000 bpd projected in January. This revision is attributed to sustained capital discipline and weaker drilling activity momentum in the U.S., positioning Brazil to become the largest source of non-OPEC+ output expansion in 2026, with an anticipated increase of 160,000 bpd.
In terms of production, OPEC's crude output from its 12 members rose by 263,000 bpd in July to 27.54 million bpd, according to secondary sources cited by the organization. The broader OPEC+ alliance, which includes Russia and other allies, also saw its crude output average 41.94 million bpd in July, marking an increase of 335,000 bpd from June following recent output hikes.
In the Eurozone, European Central Bank (ECB) Governing Council member Joachim Nagel provided an optimistic assessment of the monetary policy landscape. Nagel stated that interest rates are currently at a "very good level" and that the ECB can react flexibly if necessary. He added that inflation is "no longer a major challenge," although he cautioned against excessive optimism and stressed the need for a "steady hand" in policy, particularly given ongoing tariff uncertainty. The ECB expects inflation to reach its 2% target by the end of 2025 at the latest.
Meanwhile, in Brazil, the mid-month inflation rate, measured by the IPCA-15, accelerated in July. Monthly inflation (M/M) registered 0.33%, higher than the estimated 0.26% and up from 0.26% in June. The annual inflation rate (Y/Y) for July edged up to 5.30%, slightly above the previous month's 5.27% and remaining above the central bank's 3% target. Despite the slight acceleration, signs of easing underlying core inflation and the resilience of the Brazilian Real suggest the central bank is likely to hold interest rates steady at its upcoming meeting.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.