OPEC says that a recovery in Crude Oil demand will be focused on 2-H of the yr as the impact of the VirusCasedemic lingers as a headwind for the group and its allies in supporting the market.
In a monthly report, the Organization of the Petroleum Exporting Countries said demand will rise by 5.89-M BPD in Y 2021.
“Total oil demand is foreseen to reach 96.3 million bpd with most consumption appearing in the second half,” OPEC said in the report.
“This year’s demand growth will not be able to compensate for the major shortfall from 2020 as mobility is forecast to remain impaired throughout 2021.”
The latest forecasts could boost cautious views among OPEC and its allies, known as OPEC+, on how quickly to unwind more of last yr’s record oil output cuts.
OPEC raised its forecast of world economic growth this year to 5.1% from 4.8% as activity accelerates by the end of 1-H. Still, it sees the mobility restrictions continuing to dampen Crude Oil demand, despite faster growth.
“Oil-intensive sectors, especially travel and transportation, will remain disproportionately affected, with a larger negative impact on 2020 oil demand and a lower positive contribution to 2021 oil demand, relative to global economic growth,” OPEC said.
While the curbs persist, rivals are boosting supply and OPEC raised its forecast of non-OPEC output growth to almost 1-M BPD led by Canada, the United States, Norway and Brazil.
Partly due to the higher non-OPEC supply forecast, OPEC trimmed its estimate of global demand for its Crude Oil to 27.3-M BPD this yr. This still allows for higher average OPEC production in 2021.
Have a healthy day, Keep the Faith!