OPEC lowers its forecast for global oil demand

Opec's latest Monthly Oil Market Report (MOMR) expects oil demand to decrease by 9.1mn b/d to 90.6mn b/d this year, down by 100,000 b/d from last month's projection, Report says.

The downward revision reflects weaker-than-expected demand in the second quarter from some non-OECD countries and a decline in global GDP in 2020 to 4pc, from 3.7pc last month, leading to lower oil demand expectations for the second half of the year.

Opec's forecast for oil demand growth in 2021 is unchanged at 7mn b/d on the year, with consumption projected to reach 97.6mn b/d. The organization assumes that the Covid-19 pandemic will be largely contained and that economic activity will increase by 4.7pc.

Opec has reduced the projected call on its own members' crude to 23.4mn b/d in 2020, down by 400,000 b/d from the previous month and a fall of 5.9mn b/d from 2019. The call on Opec crude in 2021 has also been revised down by 500,000 b/d from the previous month to stand at 29.3mn b/d.

The reduction in the projected call on Opec crude in 2020 follows a rise in the forecast for non-Opec supply to 62.11mn b/d in 2020, down by 3.03mn b/d on the year. Its previous projection was for a 3.26mn b/d decline.