OPEC cuts 2021 oil demand estimate due to lower economic outlook
World oil demand will rebound more slowly in 2021 than previously thought as coronavirus cases rise and economic growth outlook dims, the Organization of the Petroleum Exporting Countries (OPEC) said on Tuesday.
Demand will decline by 6.54 million barrels per day (bpd) next year to 96.84 million bpd, 80,000 bpd less than its last month's prediction.
This revision mainly reflects lower economic growth outlook for both the Organization for Economic Co-operation and Development (OECD) and non-OECD regions, compared to last month's forecast, it said.
"We believe that this is the calculated volume to cater for the demand coming back," United Arab Emirates Energy Minister Suhail al-Mazrouei told the Energy Intelligence Forum on Tuesday, referring to the 2021 output increase.
Oil prices have collapsed as the coronavirus crisis curtailed travel and economic activity. While in the third quarter an easing of lockdowns allowed demand to recover, OPEC sees the pace of economic improvement slowing again.
OPEC has steadily lowered its 2021 oil demand growth forecast from an initial 7 million bpd expected in July.
The group also cut its estimate of world oil demand in the current quarter by 220,000 bpd. It left its estimate of the scale of this year's historic contraction in oil use steady at 9.47 million bpd.
It also noted that even with a rapidly marketable vaccine, the impact of COVID-19 in 2021 would be felt on a larger scale than previously envisaged, as the global economy continues to adapt to the "new normal," ranging from supply chain alterations to a rise in digitalization, more home-office bound working and less business-related travel.