An oil pumping jack, also called a “nodding donkey”, in an oilfield close to Dyurtyuli, within the Republic of Bashkortostan, Russia, on Thursday, Nov. 19, 2020.
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LONDON — Oil producer group OPEC on Thursday saved its 2021 forecast for international oil demand progress unchanged, however warned uncertainties over the influence of the coronavirus pandemic stay excessive.
The closely-watched oil market report comes as coronavirus instances proceed to surge worldwide, with new lockdowns imposed in Europe and elements of China.
In latest weeks, optimism concerning the mass rollout of coronavirus vaccines seems to have been tempered by the resurgent charge of virus unfold.
It has resulted in oil producers making an attempt to orchestrate a fragile balancing act between provide and demand as elements together with the tempo of the pandemic response proceed to cloud the outlook.
“Uncertainties stay excessive going ahead with the principle draw back dangers being points associated to COVID-19 containment measures and the influence of the pandemic on client conduct,” OPEC mentioned on Thursday.
“These can even embrace what number of nations are adapting lockdown measures, and for a way lengthy. On the identical time, faster vaccination plans and a restoration in client confidence present some upside optimism.”
The 13-member group mentioned it anticipated international oil demand in 2021 to extend by 5.9 million barrels per day year-on-year to common 95.9 million barrels per day. The forecast was unchanged from final month’s evaluation.
The group mentioned world oil demand progress in 2020 declined by 9.eight million barrels per day year-on-year to common 90 million barrels per day. The group famous the autumn was marginally lower than anticipated in December.
OPEC mentioned its 2021 forecasts “assume a wholesome restoration in financial actions together with industrial manufacturing, an bettering labour market and better car gross sales than in 2020.”
“Accordingly, oil demand is anticipated to rise steadily this 12 months supported primarily by transportation and industrial fuels,” the group mentioned.
Oil costs ‘pushed by expectations’
OPEC and its non-OPEC allies, an alliance typically known as OPEC+, lower oil manufacturing by a document quantity in 2020 in an effort to help costs, as strict public well being measures worldwide coincided with a gas demand shock.
OPEC+ initially agreed to chop output by 9.7 million bpd, earlier than easing cuts to 7.7 million and ultimately scaling again additional to 7.2 million from January. OPEC kingpin Saudi Arabia has since mentioned it plans to chop output by an additional 1 million barrels per day in February and March to cease inventories from increase.
Worldwide benchmark Brent crude futures traded at $55.77 a barrel on Thursday, down 0.5% for the session, whereas U.S. West Texas Intermediate (WTI) futures stood at $52.76, round 0.3% decrease. Oil costs are at the moment on tempo for his or her third consecutive week of positive factors.
“Anybody who retains his or her finger on the heartbeat of the oil market is aware of that costs are at the moment pushed by expectations and never by fast realities,” Tamas Varga, senior analyst at PVM Oil Associates, mentioned in a analysis word.
“Those that disagree are really useful to have a fast have a look at the forecasts of H1 2021 oil demand over the previous few months and evaluate these estimates with worth developments,” he added.
Forward of Thursday’s publication of its oil market report, OPEC had steadily lowered its demand progress forecasts for 2021.
Different main oil forecasters, together with the Worldwide Vitality Company and the U.S. Vitality Info Administration, have additionally downgraded their oil demand progress estimates for 2021 in latest weeks.