The Organisation of the Petroleum Countries (OPEC) has celebrated its diamond anniversary, with this year marking one of the greatest global challenges that triggered the worst economic recession and oil market downturns in its history.
OPEC reported that 2020 world oil demand growth forecast was cut by 0.4 million barrels per day (mb/d) compared with August’s monthly oil market report to a decline of 9.5 mb/d, leading to a total demand of 90.2 mb/d.
“Turning to 2021, the negative impact on oil demand in other Asia is projected to spill over into the first half of 2021. Additionally, risks remain elevated and skewed to the downside, particularly in relation to the development of COVID-19 infection cases and potential vaccines,” OPEC explained in its monthly oil market report.
Furthermore, the report highlighted that the speed of recovery in economic activities and oil demand growth potential in other Asian countries, including India, remain uncertain.
Next year, world oil demand is forecast to grow by 6.6 mb/d, some 0.4 mb/d lower compared with the previous month’s assessment to average 96.9 mb/d.
In addition, the non-OPEC liquids production forecasts in 2020 were revised up by 360 thousand barrels per day (tb/d), due to a higher-than-expected recovery in the United States in June, which added 1.0 mb/d month-on-month, and now contracting by 2.7 mb/d, year-on-year.
The non-OPEC liquids production forecast for 2021 is adjusted up by 371 tb/d and now is expected to grow by 1.0 mb/d.
In terms of balance of supply and demand, OPEC crude in 2020 is revised down by 0.7 mb/d from the previous month to stand at 22.6 mb/d, around 6.7 mb/d lower than 2019.
However, demand for OPEC crude in 2021 has decreased by 1.1 mb/d from the previous month to stand at 28.2 mb/d, sitting at 5.5 mb/d, which is set to be higher than 2020.