OPEC expects a record increase in world oil demand in 2021

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Sharjah 24 – Reuters:
The Organization of Petroleum Exporting Countries (OPEC) announced in its monthly report that the global oil demand will rise to a record level of seven million barrels per day in 2021, with the global economy recovering from the pandemic of the emerging Corona virus, but it will remain below the levels of 2019.

This is the first report issued by OPEC to its forecasts for oil markets in the next year.

The organization pointed out that the forecast assumes that no further downside risks will be realized in 2021, such as trade tension between China and the United States, high levels of debt, or a second wave of Corona infections.

And OPEC added in its report, assuming that Covid-19 is contained, especially in large economies, allowing private consumption of families to recover, and investment supported by massive stimulus measures taken to combat the pandemic.

Oil prices collapsed this year, after global demand fell by a third, when governments imposed general isolation measures to limit the spread of the virus.

And, “OPEC”, that the demand for oil in 2020 will decrease by 8.95 million barrels per day, which is slightly lower than its expectations in a report last month.

In 2021, the organization expects efficiency and telework gains to suppress demand growth, keeping demand below record levels in 2019.

OPEC expects to cover the largest share of the expected huge increase in demand in 2021, as demand for its crude exceeds six million barrels to 29.8 million barrels per day.

OPEC and its allies, led by Russia since May 2020, have cut oil production by about ten million barrels per day, or one tenth of global production to help support oil prices.

Production also fell in countries such as the United States, Norway and Canada, although it is not a party to the “OPEC +” agreement to cut production.

OPEC indicated that it expects oil supplies from outside to decline in 2020 by 3.26 million barrels per day, and to increase by 0.92 million barrels per day only in 2021.

The organization noted that it does not expect any growth in production from the former Soviet Union, although Russia, Kazakhstan and Azerbaijan reduce production together with OPEC.

OPEC expects American production to grow in 2021 by only 0.24 million barrels per day, after falling 1.37 million barrels per day in 2020 and increased by 1.7 million barrels in 2019.





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