OPEC forecasts weaker oil demand in 2020-2021

The Organization of the Petroleum Exporting Countries (OPEC) has revised down its forecasts for global crude oil demand this year and next due to the economic disruption caused by the coronavirus pandemic, its monthly report said on Wednesday, November 11.

In its latest estimates, OPEC expects global demand for crude oil to decline by 9.8 million barrels per day (bpd) in 2020, compared with its previous forecast for a drop of 9.5 million.

Overall demand was tipped to come in slightly above 90 million bpd, the report said.

Fuel for transportation and industry was likely to remain affected in the 4th quarter of the year, it explained. 

For 2021, OPEC expects quite a sharp rebound of 6.2 million bpd, but this represents a cut of 300,000 bpd on its previous estimate, putting global demand at 96.3 million bpd.

In October, output by OPEC members increased by 322,000 bpd from the level in September, according to the report, with Libya, and to a lesser extent Iraq, accounting for most of the increase.

On Monday, November 9, Saudi Arabia’s energy minister said that a deal between OPEC and non-cartel producers, principally Russia, on oil output cuts could be tweaked if consensus was found.

Under the terms of an agreement struck in April, the so-called OPEC+ group pledged to cut output by 9.7 million bpd from May 1 until the end of June.

The cuts were then to be gradually eased from July, to 7.7 million bpd through to December and then 5.8 million bpd from January. – Rappler.com