Global oil demand should benefit from a stronger economic recovery and vaccinations in the second half of this year, OPEC said on Thursday, adjusting its outlook for the second half of 2021 upwards and slightly raising its oil demand forecast. oil for the whole year.
The cartel, however, scaled back its Oil Market Monthly Report (MOMR) its estimates of global oil demand for the first half of the year due to prolonged shutdowns in major economies in Europe and high unemployment rates in the United States which are slowing the recovery.
In hindsight, the OPEC+ group’s decision last week not to increase collective crude oil production from April, leaving only small exemptions for Russia and Kazakhstan, doesn’t seem so surprising after all, as the cartel now sees oil demand in the first and second quarters of 2021 lower than last month’s assessment.
In this month’s report, OPEC cut its oil demand estimate for the first quarter by 180,000 bpd and for the second quarter by 310,000 bpd from the February outlook.
The cartel is much more optimistic in the second half and has raised its estimates for third and fourth quarter demand, “reflecting expectations of a stronger economic recovery with the positive impact of vaccination rollouts.”
In the third quarter, OPEC now sees demand at 97.43 million bpd, up 400,000 bpd from last month’s estimate. For the fourth quarter, global oil demand is expected at 98.91 million bpd, up nearly 1 million bpd – 970,000 bpd – from the February estimate.
For the full year, OPEC expects oil demand to rise by 5.9 million bpd, up 100,000 bpd from last month’s forecast. Related: Nigeria’s lawsuit against Shell could trigger major oil exodus
Currently, the organization expects total oil demand to reach 96.3 million bpd, with most of the consumption appearing in the second half of the year.
The basic assumption of OPEC’s bullish view for H2 is that by the start of the second half of 2021, “the pandemic will be largely contained with the majority of the population of Western economies vaccinated, COVID-19 not not posing a major obstacle to emerging and developing economies.
“However, this year’s demand growth will not be able to compensate for the major shortfall in 2020, as mobility is expected to remain impaired throughout 2021,” OPEC said.
By Tsvetana Paraskova for Oilprice.com
More reading on Oilprice.com: