JAKARTA (TheInsiderStories) - The Organization of Petroleum Exporting Countries and its allies (OPEC+) panel ended with no policy recommendation but lowered its oil demand growth forecast for this year by 300,000 barrels per day (bpd). The oil cartel now estimates that global oil demand will expand by 5.6 million bpd in this year.
The secretary general, Mohammad Sanusi Barkindo, said in a videoconference held on Wednesday, with economies in lockdown, oil demand dropping by more than 20 million bpd and West Texas Index plummeting negative. In the first three months of 2021, he adds, the members have witnessed further positives for the recovery after vaccine rollouts, as well as from fiscal stimulus, most recently the huge US$1.9 trillion package in the United States (US).
“Expectations for global economic growth in 2021 are now higher at 5.1 percent, compared to 4.8 percent at our last meeting. This positive impetus is driven by the additional US stimulus measures, as well as a continued acceleration in the recovery in Asian economies, although we have recently seen a temporary stalling of the rebound in India,” he told the audiences.
He continued, there is also a continuing divergence between the first and second half of 2021. The first half has again been adjusted lower, mainly due to extended measures and new lockdowns in many key parts of Europe. In contrast, oil demand prospects in the second half have remained relatively steady, reflecting expectations for a stronger economic recovery and positive impact of vaccination rollouts.
“On the supply side, non-OPEC liquids for 2021 is forecast to grow by almost 1 million bpd, compared to expectations of 700,000 bpd at our last meeting. Its also interesting to note that the US liquids supply forecast remains unchanged, with growth of 160,000 in 2021,” said Barkindo.
From the perspective of inventories, preliminary data for February 2021 shows a further drawdown of around 45 million barrels in OECD commercials, following a drop of around 14 million barrels in January. The February level is 95 million barrels higher that the same time one year ago, and 58 million barrels above the average for the period 2015 - 2019.
He revealed, its important to note that the February stock draw is attributed mainly to products, particularly in the US market, as product inventories moved sharply lower on the back of very low refinery runs as a result of severe winter weather.
“The realignment of inventories is also been driven by the excellent conformity to the production adjustments, and here we should again acknowledge the large and generous additional commitment of 1 million bpd for February, March and April from the Kingdom of Saudi Arabia,” concluded by Barkindo.
Written by Editorial Staff, Email: theinsiderstories@gmail.com