Lagos — The Organization of Petroleum Exporting Countries, OPEC has revealed plans to invest in vaccines to support developing countries to speed up oil market recovery.
In his Remarks at the 30th Meeting of the Joint Ministerial Monitoring Committee, JMMC held via videoconference on Tuesday, Mohammed Barkindo, Secretary-General of the Organization said its compass points towards “durable” demand recovery, hence the need to acquire sufficient vaccines to “improve chances for a durable and inclusive recovery”.
Around 1.9 billion vaccine doses have been administered globally.
“Turning first to the global economy, our latest projections show GDP growth of 5.5% in 2021, up from 5.4% at our last meeting and driven by expectations for a robust second half of the year”.
Barkindo said China and the US continue to fuel the growth prospects for the year, with China’s economy on course to expand by 8.5% and the US by 6.2%, adding that despite the tragic second wave of COVID-19 in India, India’s economy is still expected to grow by 9.7%.
“The Euro-zone, where there has been a gradual easing of strict lockdowns, should benefit from pent-up consumer demand and the beginning of the summer holiday season. Growth in the Euro-zone this year is forecast at 4.2%.
OPEC remained unchanged in its projections for oil from its last meeting, with demand expected to grow by 6 mb/d to around 96.5 mb/d on average for the year, an increase of 6.6%.
“As with the economy, the market outlook for later this year looks especially promising. In fact, we anticipate that demand will surpass 99 mb/d in the fourth quarter, which would put us back in the range of pre-pandemic levels.
“Overall, demand in countries outside the OECD should rise by nearly 6.8%, or 3.3 mb/d, this year, and by almost 6.4%, or 2.7 mb/d, in the OECD. This is a welcome turn of events from the sombre situation we experienced in 2020”, he said.
On supply, he said non-OPEC liquids production is now forecast to grow at a slightly slower pace than expected last month, rising by around 700,000 b/d in 2021 to an average of 63.6 mb/d.
In the US, liquids production is expected to dip slightly, to around 17.6 mb/d, despite the improving market conditions and demand prospects.
Both conventional and tight crude production are forecast to decline in the US, while NGLs and biofuel output are expected to rise.
In contrast to the US, liquids production is expected to grow in Canada, Brazil, China and Norway.
“We continue to keep a close watch on OECD commercial oil inventories. April data showed a drop of 6.9mb from the previous month, to 2.96 billion barrels. On the positive side, inventories have fallen by 250mb from their peak of 3.2 billion barrels in the middle of 2020. OECD commercial stocks fell to 66 days in April 2021, 12.3 days lower than the April 2020 levels, but still 3.9 days above the 2015-2019 average,” he said.