OPEC lowers 2020 oil demand forecast

The Organization of the Petroleum Exporting Countries (OPEC) has lowered its 2020 oil demand forecast to negative -9.8 million barrels a day.

OPEC’s secretary-general Mohammad Sanusi Barkindo said via videoconference at the 24th meeting of the JMMC on November 17 that the number marks a drop of 0.3 mmbpd from the group’s October meeting and a reduction of 11 mmbpd against a growth of 1.2 mmbpd that was expected back in January.

The OPEC secretary-general added that the group has revised down expected growth for 2021 to 6.2 mmbpd. This figure previously stood at 6.5 mmbpd.

“The recent revisions are due to the slow pace of the economic recovery and recent Covid-19 containment measures, which are assumed to impact transportation and industrial fuel demand well into 2021”, Barkindo said.

He warned that the Covid-19 pandemic shows no sign of abating but added that the announcement of various Covid-19 vaccines with over 90 per cent efficacy rates has given a ‘shot in the arm’ to the economic and oil demand outlook and offered ‘hope going forward’.

“The declaration of cooperation has achieved some hard win successes in tackling the impact of the Covid-19 pandemic on the global oil market.

“With the advent of second and in some cases third waves, we cannot be complacent. We need to fully understand what is required and be ready to adapt to any changing market dynamics to ensure we stay on the path that helps restore balance, and sustainable stability to support growth and investments in the months and years ahead.

“We need the courage and flexibility we have all shown this year to take the decisions required ahead, one step at a time, guided by the data and robust analysis”, Barkindo said in his speech.

As of November 18, there have been 56.6 million confirmed cases of Covid-19 globally, with 1.35 million deaths, according to the latest information from the WHO.