OPEC: Oil Demand to Fall in 2020 by 9.1 Million Barrels per Day

The Organization of the Petroleum Exporting Countries (OPEC) forecasts a year-on-year contraction of 9.1 million barrels per day (b/d) according to a new report published on Wednesday.

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The OPEC predicts that total oil demand in 2020 is now projected to reach 90.6 million b/d as the global oil market started to recover since May and continued this trend for three consecutive months.

The organization attributed this increment to the unprecedented decision of cutting production made by  OPEC and non-OPEC countries participating in the Declaration of Cooperation (DOC) amid the COVID-19 pandemic.

Moreover, the OPEC reports that global refinery margins trended upwards last month, as a continued increase in mobility activities, amid the peak summer season.

However, global crude and product trade remains very low compared to the same period last year. The report warns that preliminary data point out a fall os U.S. crude imports in July " as the inflow of long haul tankers from the Middle East decreased." 

Likewise, Japan’s crude imports hit their lowest level in more than a decade in June, down by 39% from the peak seen in March, OPEC explains.

The organization warns that looking ahead, crude and product price developments in 2020 will continue to be impacted by concerns over the second wave of infections and higher global stocks. 

In this sense, the OPEC says it is necessary to continue the efforts to "support market rebalancing both on the supply side through production adjustments by OPEC and non-OPEC producers participating in the DOC and voluntary production adjustments by other producers, as well as on the demand side through government-led stimulus efforts to revive the global economy."