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OPEC cut its forecasts for 2020 and 2021 global oil demand on Wednesday, citing rising COVID-19 cases and government lockdowns as a risk to the commodity market.
In its November report, the lowered its 2020 demand projection by 0.3 million barrels to 90 million barrels per day.
The revision follows similar downward adjustments from earlier in the year and places the year’s forecasted global demand at its lowest since 2013.
Next-year demand was revised lower by 0.3 million barrels to roughly 96.3 million barrels per day. While markedly higher than the 2020 forecast, it still sits well below the pre-pandemic high of 99.8 million barrels.
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OPEC now expects the coronavirus pandemic to have wiped out seven years of growth in global oil demand this year.
In its latest monthly report, the coalition lowered its demand outlook for crude oil in 2020 by 0.3 million barrels to 90 million barrels per day. OPEC has repeatedly cut its forecasts for demand growth over the past few months and now expects global consumption to hit its lowest since 2013 this year, according to past reports.
OPEC also cut its 2021 forecast by 0.3 million barrels to roughly 96.3 million barrels per day. Demand is expected to pick up more swiftly next year, as the economy recovers from the effects of the pandemic, but it will still fall well below the 99.8 million barrels per day seen in 2019.
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“These downward revisions mainly take into account downward adjustments to the economic outlook in OECD economies due to COVID-19 containment measures, with the accompanying adverse impacts on transportation and industrial fuel demand through mid-2021,” OPEC said.
A resurgence in cases of COVID-19 has plunged several major European economies into new lockdowns and threatens to reverse a lot of the economic recovery that has already taken place. The oil price nosedived in March as the sudden implementation of quarantine orders slammed travel activity and, in turn, demand for crude. US futures even turned negative in April as a supply glut overwhelmed traders who then struggled to find storage for unwanted inventory.
While OPEC continues to pump less oil than the market requires, its latest forecast shows it’s not cutting down on the global surplus as fast as previously expected.
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The coalition is set to meet on November 30 and December 1 to further discuss its production policy and potential supply cuts. OPEC and several partner nations, including Russia and Oman, established a record supply cut of 9.7 million barrels per day in April but trimmed the cut to 7.7 million in August. The group plans to shrink the cut further in 2021, but …read more
Source:: Business Insider