OPEC sticks to 2021 oil demand growth forecast despite Indian COVID crisis

© Reuters. FILE PHOTO: A 3D-printed oil pump jack is seen in front of displayed OPEC logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

By Alex Lawler

LONDON (Reuters) – OPEC on Tuesday stuck to its prediction of a strong recovery in world oil demand in 2021 as growth in China and the United States counters the coronavirus crisis in India, an outlook that bolsters the group’s plan to gradually ease output cuts.

The Organization of the Petroleum Exporting Countries expected demand to rise by 5.95 million barrels per day (bpd) this year, or 6.6%, its forecast unchanged from last month.

The oil organisation, however, cut its demand forecast for the second quarter by 300,000 bpd.

“India is currently facing severe COVID-19-related challenges and will therefore face a negative impact on its recovery in the second quarter, but it is expected to continue improving its momentum again in the second half of 2021,” OPEC said in its monthly report.

Oil was trading close to $68 a barrel before the report was released. Prices have risen to pre-pandemic highs above $71 this year, boosted by hopes of economic recovery and OPEC+ cuts, although concern about Indian demand has weighed.

OPEC in the report raised its forecast of 2021 world economic growth to 5.5% from 5.4% seen earlier, assuming the impact of the pandemic will have been “largely contained” by the beginning of the second half of the year.

OPEC and its allies, known as OPEC+, agreed in April to gradually ease oil output cuts from May, after the new U.S. administration called on Saudi Arabia to keep energy affordable for consumers.

READ  Macau casino stocks fall after gambling revenue disappoints

The report also showed slightly higher OPEC oil output already as Iran, exempt from making voluntary cuts due to U.S. sanctions, pumped more in April, driving a 30,000 bpd rise in the group’s output to 25.08 million bpd.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Please enter your comment!
Please enter your name here