OPEC on Wednesday trimmed its global oil demand forecasts for the remainder of this year and 2021, citing a weaker-than-expected economic outlook and a surge in coronavirus cases, APA reports citing CNBC.
In a closely watched report, the group of oil-producing nations said it now expects world oil demand to contract by around 9.8 million barrels per day year over year in 2020. That reflects a downward revision of 0.3 million barrels from last month’s assessment.
For next year, OPEC said oil demand growth will rise by 6.2 million on an annual basis, representing a downward revision of another 0.3 million barrels from its October report. The group has steadily lowered its oil demand outlook for 2021 from an initial expectation of 7 million in July.
“These downward revisions mainly take into account downward adjustments to the economic outlook in OECD economies due to COVID-19 containment measures, with the accompanying adverse impacts on transportation and industrial fuel demand through mid-2021,” OPEC said in the report.
The report comes ahead of the group’s Nov. 30 and Dec. 1 meeting with non-OPEC allies to discuss the next phase of oil production policy.
The energy alliance, a grouping known collectively as OPEC+, had agreed to a record supply cut of 9.7 million bpd starting on May 1. The cut was subsequently scaled back to 7.7 million in August and OPEC+ has said it plans further tapering next year.