(OPEC) sticks to expectations of a rise in oil demand
Markets overcome “fuel stocks frustration”
Friday – 1 Dhu al-Qi’dah 1442 AH – 11 June 2021 AD Issue No. [
Oil prices returned to rise on Thursday, as OPEC stuck to its expectation of a strong recovery in global demand (Reuters)
London: «Middle East»
The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report Thursday that demand will rise by 5.95 million barrels per day this year, equivalent to 6.6 percent. This forecast did not change for the second month in a row.
The forecast stated in the report comes even after a slower recovery than expected in the first half of the year, while warning of “great uncertainty” surrounding the pandemic, such as the possibility of new strains of the “Corona” virus emerging. OPEC said in its monthly report that “the recovery of the global economy has been delayed due to the return of the high incidence of (Covid-19) and renewed closures in major economies, such as the euro area, Japan and India.” “Overall, the recovery in global economic growth, and thus oil demand, is expected to gain momentum in the second half of the year,” she added.
OPEC expects the global economy to grow by 5.5 percent in 2021, unchanged from the previous month, assuming that the impact of the pandemic has been “largely contained” by the beginning of the second half. The oil price has increased 39 percent since the beginning of the year thanks to rising demand and supply cuts from OPEC and its allies within the framework of OPEC +.
OPEC + agreed in April to gradually ease oil production cuts from last May to next July, and confirmed the decision at a meeting it held on June 1. Most of the production cuts will continue after July. OPEC said that the efforts of OPEC + “fundamentally contributed to leading the way towards rebalancing the market.”
The report showed greater oil production by OPEC, which reflects the decision to pump more and increases from Iran, which is excluded from making voluntary cuts due to the US sanctions imposed on it. OPEC said production rose in May by 390,000 bpd to 25.46 million bpd.
In conjunction, Brent crude futures rose 36 cents, or 0.5 percent, to $ 72.58 a barrel by 13:02 GMT, close to a peak not seen since May 2019, and US oil futures rose 34 cents, or 0.34 percent. to $70.30 a barrel, still near its highest level since October 2018.
“The market is recovering impressively from the (US) bleak weekly EIA report yesterday, the weekly decline in gasoline demand was particularly disappointing,” said Tamas Varga, analyst at PVM Oil Associates.
The US Energy Information Administration said Wednesday that US crude oil stocks, which include strategic petroleum reserves, fell for the eleventh week in a row as refineries boosted production, but fuel stocks rose sharply due to weak consumer demand.
Crude stocks, excluding strategic petroleum reserves, fell 5.2 million barrels in the week ending June 4 to 474 million barrels, the third consecutive weekly decline. But fuel stocks rose strongly.
In India, the third largest oil consumer in the world, demand for fuel fell in May to its lowest level since August last year, with a second wave of infections (Covid-19) causing disruption to transportation and reducing economic activity in the country.