OPEC+ Panel Sees Weaker Oil Demand in 2021

EghtesadOnline: OPEC and its allies have revised oil demand scenarios for 2021 with demand seen weaker than previously anticipated, a confidential document seen by Reuters shows, supporting the case for a tighter supply policy next year.

News ID: ۷۵۱۵۲۳

18 November 2020

“For 2021, oil demand is expected to grow by 6.2 million barrels per day, year on year, representing a downward revision of 0.3 million barrels per day compared to last month’s assessment,” the report by a panel of officials from OPEC+ producers, called the Joint Technical Committee (JTC), said.

JTC met virtually on Monday ahead of the meeting of the Joint Ministerial Monitoring Committee, which meets on Tuesday and can recommend policy steps to OPEC+.

OPEC+ group of producers was due to raise output by 2 million bpd in January - about 2% of global consumption - as part of a steady easing of record supply cuts implemented this year.

But with demand for fuel weakening, OPEC+ has been considering delaying the increase. An option gaining support among OPEC+ nations is to keep the existing curbs of 7.7 million bpd for a further three to six months, OPEC+ sources said, rather than tapering the cut to 5.7 million bpd in January.

The JTC has considered both extension scenarios, according to the report.

Oil prices edged up on Tuesday on expectations OPEC and its allies will extend oil production cuts for at least three months, while sentiment was bolstered by news of another promising coronavirus vaccine.

Brent crude futures for January rose 18 cents, or 0.4%, to $44.00 a barrel and US West Texas Intermediate crude for December added 8 cents, or 0.2%, to $41.42 a barrel.