In a sentence – OPEC is optimistic on oil market balancing.

According to their latest oil market report, released today, OPEC said that oversupply in the oil market is set to balance in 2016.

“Provided there is a clearer picture regarding oil supply and demand, the expected improvement in global economic conditions should result in a more balanced oil market toward the end of the year”

It cited lower buildup in stocks as an evidence. Global commercial crude stocks rose by 19 million barrels in February, another 12 million in March-April, but declined by 8 million barrels in May.

OPEC expects oil demand to rise 1.2 million barrels/day this year and reach 94.18 million barrels/day. Demand is to be led by India.

On the supply side, it expects non-OPEC supply to decline by 0.74 million barrels/day this year to 56.4 million barrels/day this year. The biggest drop in production is expected to be the United States and that is about 0.42 million barrels/day to 13.57 million barrels/day.

Supply is rising from OPEC. Last December, at its meeting in Vienna, it scrapped the output ceiling and 13 member OPEC pumped 32.36 million barrels of crude in May. Saudi Arabia alone produced about 10.24 million barrels.

Regarding recent recovery in oil prices, OPEC report attributed that to the weaker U.S. dollar, strong gasoline consumption in the U.S., various supply disruptions, the accelerated decline in US crude oil output, forecasts for a sharp fall in overall non-OPEC oil supply this year and record bullish bets by speculators for higher futures prices.