JAKARTA (TheInsiderStories) – Organization Petroleum Exporter Countries (OPEC) trimmed oil-demand growth by 100,000 barrels per day in monthly report released on August 13. It said, the global oil demand growth is forecast to decline by 9.1 million barrels per day (mb/d).
This is 100,000 barrels lower than last month’ forecast, mainly due to lower economic activity levels in a few major non-OECD countries. On a quarterly basis, the more-than-expected decline in the non-OECD countries in the second quarter (2Q) of 20 was partially counterbalanced by better-than-expected demand in Europe.
OPEC said, the 2H of 2020 is adjusted lower, compared to July’ assessment, in line with the expected softer economic momentum, mainly in a few non-OECD countries. While, for 2021, the world oil demand growth is forecast to rise by 7.0 mb/d, unchanged from last month.
In addition, the organization reported, total world consumption is now pegged at 97.6 mb/d in 2021. The forecast assumes that COVID-19 will largely be contained globally, with no further major disruptions to the global economy. Consequently, economic activities are projected to rebound steady in both OECD and non-OECD.
As a result, the OECD countries are expected to witness oil demand growth of 3.5 mb/d in 2021 compared to this year. The non-OECD countries are expected to witness similar growth, with China and Other Asia leading the gains.
The producers rated, the world oil supply despite the dramatic drop in oil output in 2Q of 2020, particularly in OECD Americas, the non-OPEC liquids production growth forecast in 2020 (including processing gains) is revised up by 235 tb/d from the previous month’ assessment, due to a better-than-expected recovery in 2H of this year, and now is expected to decline by 3.03 mb/d in annual basis.
OPEC said, major oil companies have reported some significant 2Q of 2020 supply losses due to the pandemic. With the downward production adjustments from the non-OPEC countries participating in the Declaration of Cooperation (DoC) and production shut-ins in countries outside of the DoC during the same quarter, total non-OPEC supply in the second quarter dropped by around 6 mb/d.
However, non-OPEC crude oil production in 3Q of 2020 is expected to witness some growth, particularly as of August. Non-OPEC liquids production in 2021 is revised up by 66 tb/d and is now expected to grow by 980,000 b/d, mainly due to a better-than-expected recovery in production of Canada.
Nevertheless, uncertainty surrounding financial and logistical constraints for US production, as well as a potential second wave of COVID-19 infections globally, remains a concern. OPEC NGLs are estimated to decline by 100,000 b/d in 2020, while the preliminary 2021 forecast indicates growth of 80,000 b/d to average 5.13 mb/d.
The member countries crude oil production in July increased by 980,000 b/d compared to previous month to average 23.17 mb/d, according to secondary sources.
Oil prices have collapsed as the epidemic curtailed travel and economic activity. To tackle the drop in demand, agreed to a record supply cut of 9.7 mb/d that started on May 1, while the United States and other nations said they would pump less.
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