(ET)
World oil demand will rebound more slowly in 2021 than previously thought as corona virus cases rise, OPEC said on Tuesday, adding to headwinds faced by the group and its allies in balancing the market.
Demand will rise by 6.54 million barrels per day (bpd) next year to 96.84 million bpd, the Organization of the Petroleum Exporting Countries said in a monthly report. The growth forecast is 80,000 bpd less than expected a month ago.
A further weakening of demand could threaten plans by OPEC and allies to taper in 2021 the record oil output cuts they made this year. OPEC is keeping an eye on the situation but currently has no plan to cancel the supply boost.
“We believe that this is the calculated volume to cater for the demand coming back,” United Arab Emirates Energy Minister Suhail al-Mazrouei told the Energy Intelligence Forum on Tuesday, referring to the 2021 output increase. Oil prices have collapsed as the corona virus crisis curtailed travel and economic activity. While in the third quarter an easing of lock downs allowed demand to recover, OPEC sees the pace of economic improvement slowing again.
