OPEC+ cuts its fuel demand recovery forecast

Photo: EPA

The expanded panel of oil producing countries OPEC+ said it expects world oil demand and consumption to recover at slower pace than previously estimated, Reuters reported. The 2021 oil demand growth forecast had to be trimmed by 300,000 barrels per day following concerns linked to global market outlook.

The Joint Technical Committee, which advises the group of oil-producing nations that includes Saudi Arabia and Russia, met on ahead of a ministerial meeting on Thursday to decide output policy.

“Despite the ongoing destocking of commercial OECD stocks, they remain above the 2015-2019 average, while recognising that prevailing volatility in the market structure is a signal of fragile market conditions,” the panel said in the report. Under its base case scenario, it now expects oil demand to grow by 5.6 million barrels per day this year, down by 300,000 bpd from its previous forecast. It also raised its global supply growth forecast by 200,000 bpd to 1.6 million bpd. As a result, it now sees oil stocks in the industrialised world dipping below the 2015-2019 average in August, a month later than it previously forecast.

OPEC and allied producers, a group known as OPEC+, are currently curbing output by just over 7 million bpd in a bid to support prices and reduce oversupply. Saudi Arabia has added to those cuts with an additional one million bpd. Saudi Arabia is prepared to support extending oil cuts and is also ready to prolong its own voluntary cuts, a source briefed on the matter told Reuters on Monday.

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