OPEC worsens oil consumption forecasts in 2020 and 2021

The Organization of Petroleum Exporting Countries (OPEC) worsened forecasts for world oil consumption in 2020 and 2021 in an environment of growing uncertainty about the effect of a second wave of the pandemic on the global economy.

Oil consumption will fall 9,5 million barrels per day this year - equivalent to 9,5% - compared to 2019, 400.000 more barrels per day than just a month ago, bringing the total daily consumption to 90,2, XNUMX million barrels per day. These calculations are in the oil market report that OPEC publishes monthly and which collects data for August.

Last month, OPEC has already reduced its consumption forecasts by 100.000 barrels per day, so in the past two months the Vienna-based organization has worsened oil consumption forecasts by half a million barrels per day. For 2021, the forecast for world demand has also been reduced by around 400.000 barrels, and growth of 6,6 million barrels per day is expected, with global consumption of 96,9 million barrels per day..

“In addition to aspects related to covid-19, there are still many uncertainties, including high levels of debt, inflation, geopolitical risks, trade-related challenges, as well as the possibility of a tough Brexit”, summarizes OPEC

The demand for oil from the group's 13 members is also significantly revised from the August data. Thus, OPEC's crude oil demand in 2020 is revised downwards by 0,7 million barrels per day to 22,6 million barrels per day, about less than 6,7 million barrels per day than in 2019, indicates the report.

Although the OPEC has cut demand for its oil by 1.1 million barrels by 2021, a strong rebound is expected to increase the organisation's demand for crude oil to 28.2 million barrels, some 5.5 million barrels more than this year. This worsening of demand goes hand in hand with a fall in the world economic forecast by a tenth, from a contraction of 4 % to 4.1 %.

"China is expected to be the only major economy showing positive growth this year, although recovery in the US and the euro area seems to be gaining ground. This momentum is expected to carry over to 2021, when global growth is estimated to reach 4.7%," the report says. Oil prices have fallen back below $40 after rising coronavirus infections in major economies raised doubts about a sustained recovery.

The pandemic has hit oil demand because of the global economic slowdown, with restrictions on movement, teleworking and reduced travel causing energy consumption to plummet..