Rising coronavirus cases and weaker-than-expected economic outlook have prompted OPEC on Wednesday to lower global oil demand forecasts for the end of 2020 and for 2021. According to press release OPEC now expects global oil demand to contract by about 9.8 million barrels per day, year over year in 2020, a downward revision of 0.3 million barrels from last month.
- OPEC expects oil demand to rise by 6.2 million on an annual basis in 2021, a downward revision of a further 0.3 million barrels from October’s report
- The oil demand revisions consider downward adjustments in economic outlook in OECD economies due to COVID-19 containment measures.
- The easing of lockdown restrictions in the third quarter improved oil demand, but OPEC is concerned that rising COVID-19 cases could derail the recovery
- Oil futures recovered on Pfizer and BioNTech vaccine candidates with more than 90% efficacy, but concerns are there that it may take time before a vaccine is rolled out.
- OPEC and allies are expected to meet on November 30 and December 1 to discuss the next phase of oil production policy as plans are underway to extend cuts next year
- OPEC oil output cuts started back on May 1 where they announced supply reductions by 9.7 million bpd, but scaled it back to 7.7 million in August
Oil futures are currently gaining. CL! is up 2.35%
