OPEC again cuts global oil demand forecast for 2021

Global oil demand is expected to average 96.4 million barrels per day (bpd) this year, OPEC said Thursday, downgrading its forecast to 160,000 bpd after lowering fourth-quarter consumption expectations of 330,000 bpd compared to last month’s outlook.

In its Monthly Oil Market Report (MOMR), OPEC sees oil demand growth in 2021 to 5.65 million bpd in 2020, compared to 5.82 million bpd expected in the October report.

It was the second straight downward revision to the outlook for oil demand growth in 2021, after the cartel in October lowered its estimates of global oil demand growth for that year to 5.8. million bpd, down from September’s estimate of annual growth of 5.96 million bpd.

The downward revision in today’s report is mainly due to slower than expected demand from China and India in the third quarter.

“In addition, a slower pace of recovery in 4Q21 is now assumed due to high energy prices,” OPEC said in its report Thursday.

The cartel lowered its estimate of oil demand for this quarter by 330,000 bpd and now sees global demand for the fourth quarter of 2021 at 99.49 million bpd, from the 99.82 million bpd projected last month.

The organization, however, left its estimates for 2022 unchanged from October, still expecting global oil demand to increase by 4.2 million bpd next year from 2021. Next year, average global oil demand will exceed pre-COVID levels, the cartel says.

Total oil demand in 2022 is now estimated at 100.6 million b / d, or around 500,000 b / d above 2019 levels.

Global demand has exceeded supply over the past three quarters, which has resulted in large drawdowns in commercial oil inventories, OPEC said.

OECD commercial oil stocks fell from “a huge oversupply” in June 2020 to a deficit of 163 million barrels from the 2015-2019 five-year average at the end of September 2021, thanks to “efforts successes of the OPEC + group to stabilize the market and supported by higher crude cycles at refineries, which is an indicator of an improvement in oil demand following an economic recovery following the initial impact of the COVID-19 pandemic, ”OPEC said.

By Tsvetana Paraskova for OilUSD

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Felix J. Dixon