This organization expects, based on an improvement of the epidemiological situation in the planet, a year-on-year increase of 7 mbd

OPEC foresees a further fall in oil demand due to the COVID-19 crisis

photo_camera REUTERS/DADO RUVIC - OPEC forecasts a further fall in oil demand due to the COVID-19 crisis

OPEC on Wednesday predicted that the historic annual drop in oil consumption due to the coronavirus pandemic will be somewhat greater than expected a month ago, with the figure now standing at 9.09%, compared to the 8.03% predicted a month ago. 

This revision is attributed to the fact that the slowdown in economic activities "in some countries" in the second quarter was greater than initially estimated, the Organization of Petroleum Exporting Countries (OPEC) said in its monthly report. 

It now estimates that world demand for "black gold" will average 90.6 million barrels per day (mbd) in all of 2020, after having bordered on 100 mbd in 2019. The drop is 9.1 mbd, 100,000 bd more than calculated in the previous report. 

However the forecast is for a constant improvement: from the decline to 81.84 mbd in the last quarter oil consumption is rising to 92.10 mbd in the present quarter and to 95.83 in the last three months of the year. 

By 2021, OPEC expects, based on an improvement in the global epidemiological situation, a year-on-year increase of 7 million barrels, to an average of 97.63 million barrels. 

However, these forecasts are based on the scenario that "COVID-19 will be largely contained at the global level, without major disruptions to the global economy," the organization's experts say. 

However, they point out the uncertainty that still prevails about the future evolution of the pandemic and its impact on the oil market, which is why they believe it is necessary for the producers of the so-called "black gold" to keep their supply limited and for consumers to encourage energy consumption. 

In this regard, they not only refer to the cut in supplies agreed in April by the thirteen members of OPEC and its ten independent allies, including Russia, which has been in force since last May, but they also expect other producers to reduce their pumping in order to shore up the price of the barrel. 

"Looking ahead, the evolution of crude oil and product prices in the second half of the year will continue to be affected by concerns about a (possible) second wave of infections and the increase in world stocks (crude reserves)," they warn. "This points to the need for further efforts to support the rebalancing of the market," the OPEC analysis indicates.

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