OPEC, on Monday cut its forecast for 2021 growth in oil demand, citing “uncertainty surrounding the impact of COVID-19 and the labor market” on the outlook for transportation fuel in developed economies during the first half of next year.
Demand will rise by 5.90 million barrels per day (bpd) next year to 95.89 million bpd, the Organization of the Petroleum Exporting Countries said in a monthly report. The growth forecast is 350,000 bpd less than expected a month ago.
The prospect of a slower demand recovery has already prompted OPEC and its allies, a group known as OPEC +, to slow the increase in oil production scheduled for 2021, and an OPEC + committee is scheduled to meet on Wednesday to review the market.
Oil exceeded $ 50 a barrel, the highest level since March, supported by hopes that the introduction of “Covid-19” vaccines will lead to an increase in demand, despite the continuation of general isolation measures in major European countries.
OPEC said that while growth is expected to slow in the fourth quarter with the re-application of the general isolation measures and the possibility of extending some of these measures to 2021, the developments related to vaccines have had a positive impact on the economic outlook.
“While the 2021 forecast remains at 4.4 percent, the latest positive news about the faster-than-expected vaccination programs in major economies indicates a possible rise in growth expectations next year,” OPEC added in the report.