Lagos — The Organization of the Petroleum Exporting Countries, OPEC, has forecast oil demand growing by at least 6 million barrels per day, mf/d. in the coming year.
OPEC Secretary-General, Mohammed Barkindo, while delivering his opening remarks at the 46th meeting of the Joint Technical Committee videoconference, said the forecast of 6mb/d demand growth by next year reflected a downward revision of around 400,000 b/d.
According to him, the prospects for oil demand continues to remain weak.
“We expect demand this year to stay stagnant at about 90 mb/d, which represents a staggering decline of nearly 11 mb/d for the year compared to our January projection”, he said, adding that OPEC’s overall projections are more or less in line with those of the International Energy Agency, whose latest market report alludes to the role of the DoC and its strong conformity levels in helping to stabilise the global market.
Looking at India and China, OPEC said it expects oil demand in these countries to bounce back next year, growing by 14% in India and nearly 9% in China compared to 2020. That translates into combined growth of close to 1.7 mb/d for 2021.
On the supply side, OPEC preliminary data for October shows that the Organisation for Economic Co-operation and Development, OECD, commercial stocks fell by 39 million barrels to nearly 3.2 billion barrels.
“They are still very high and continue to hover around 208 million barrels above the five-year average. This is a source of concern to all of us, especially given the weakness in oil demand and higher supply volumes that have become more evident in the physical markets,” he said.
On the economy, Barkindo said OPEC continues to foresee global GDP declining by more than 4% this year, a stunning setback when compared to January projection of +3.1% for 2020.
“How times have changed. Our projections reflect a cautious outlook for the coming year, with growth now expected at 4.4% in 2021.” he said.
The forecast for next year represents a healthy rebound, but OPEC said it is nonetheless a downward revision from the 4.5% presented at last month’s meeting.