OPEC lowers its forecast on world oil demand again

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It foresees that on December 31 the planet will have burned 10% less than what was consumed in 2019

OPEC has once again corrected downwards, for the fourth time this year, its forecast on world oil demand, predicting now that this year it will fall by 9.77 million barrels per day (mbd) compared to 2019, before partially recovering, at 5.9 mbd, in 2021.

With this, the Organization of Petroleum Exporting Countries (OPEC) predicts that by December 31, the planet will have burned an average of 89.99 mbd, about 10% less than what was consumed last year, which is a slight downward adjustment, by 20,000 bd, compared to what was calculated a month ago.

“The increase in ( coronavirus ) infections and growing uncertainty have made the global economic recovery more fragile,” the group’s experts highlight in their monthly report, explaining the causes of the adjustments made. For next year, they forecast recovery of 6.5% (5.9 mbd) to 96.89 mbd, 0.35 mbd less than the estimate in October. This adjustment is due “to the uncertainty surrounding the impact of covid-19 and the labor market, as well as the outlook for fuel for transportation” in the first half of 2021.

In general, they highlight that their calculations are subject to these uncertainties, which “continue to be great”, especially regarding the rate of spread of the pathogen, on the one hand, and the speed of “deployment of vaccines” against covid, for the other. Other questions for “black gold” exporters revolve around what will be the policies of the future United States government after the elections won by Democrat Joe Biden, as well as the outcome of the negotiations on the relations of the European Union (EU ) with the UK after Brexit.

The “real trajectory” of the world economy will depend on all these elements, the report highlights, indicating that, at the moment, a recession of 4.2% was estimated this year and a rebound of 4.4% the next, driven this, especially for Asia.

With regard to oil supplies, it is estimated that the supply from outside OPEC will total of 62.67 mbd and 63.52 mbd in 2020 and 2021, respectively. The volume of barrels that the world requires from the organization’s members stands at 22.2 mbd this year, 7.1 mbd less than in 2019, and should rise to 27.2 mbd in 2021, according to the report.

The OPEC remains limited its supplies since May last, when he decided, along with Russia and other allies producers to withdraw from the market 9.7 mbd to cope with falling demand and prices caused by the crisis of the coronavirus. That cut moderated to 7.7 mbd in August and will ease again by 0.5 mbd, to 7.2 mbd, in January, according to the decision adopted by the group’s ministers on the 3rd.
In November, the thirteen partners together pumped 25.11 mbd, 707,000 barrels a day more than in October. This increase was mainly due to higher production in Libya, a country that, like Iran and Venezuela, is exempt from the commitment to reduce its extractions.

 

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