The Organization of the Petroleum Exporting Countries cut its outlook for world oil demand growth in 2020 and 2021. Oil demand is expected to decline by 9.5 million barrels per day, resulting in overall demand of 90.2m bpd this year.
In its monthly report on Monday, OPEC revised up its forecast for demand from developed economies that make up the Organization for Economic Cooperation and Development by around 100,000 barrels a day but dropped its forecast for non-OECD demand “due to weaker performance in Other Asia, particularly in India.”
For 2021, OPEC said it expected weakness in Asia demand to spill over, while a slower recovery in transportation fuel requirements in the OECD will limit oil demand growth potential in the region.
It now expects world oil demand to grow by 6.6 million barrels a day to 96.9 million barrels a day in 2021, around 400,000 barrels a day below its previous forecast, OPEC said.
OPEC at the same time raised its forecast for 2020 oil output, lifting its estimate for non-OPEC liquids production to rise 360,000 barrels a day to higher recovery in U.S. output in June.
According to secondary sources, OPEC said its crude oil production in August increased by 760,000 barrels a day month-over-month in August to average 24.05 million barrels a day.
Opec, which turned 60 on Monday, reiterated its commitment to the Declaration of Cooperation, a mechanism through which it is balancing the oil markets alongside non-member producers led by Russia.
The group is drawing back 7.7m bpd from the markets from August 1 onwards. Opec+, as the alliance is known, earlier cut 9.7m bpd from the markets between May and July to counter a record slump in demand and prices.
Oil prices on Monday remained below $40 with Brent, the most widely-traded crude benchmark, down 0.3 per cent at $39.71 per barrel at 8.05 pm UAE time. West Texas Intermediate, which tracks US crude grades, was marginally higher $37.34 per barrel.
Opec+ is set to convene its joint technical and ministerial monitoring committees on September 16 and 17, respectively, to review levels of compliance among producers.