Below is the Views On OPEC Cuts Oil Demand by 0.1 Million bpd for the Year 2020 By Mr. Sumeet Bagadia, Choice Broking
As per the latest OPEC monthly report, World oil demand growth in 2020 is revised down by 0.1 mb/d (barrels per day) from the previous month’s assessment, to show a decline of around 9.1 mb/d due to lower economic activity levels in a few major non-OECD countries. On a quarterly basis, the more-thanexpected decline in the non-OECD countries in the 2Q20 was partially counterbalanced by better-thanexpected demand in OECD Europe. Total oil demand is now projected to reach 90.6 mb/d. For 2021, world oil demand growth is forecast to rise by 7.0 mb/d, unchanged from last month. Total world consumption is now pegged at 97.6 mb/d in 2021. The forecast assumes that COVID-19 will largely be contained globally, with no further major disruptions to the global economy. Consequently, economic activities are projected to rebound steady in both OECD and non-OECD. As a result, the OECD countries are expected to witness oil demand growth of 3.5 mb/d, on a yearly basis in 2021. The non-OECD countries are expected to witness similar growth, with China and Other Asia leading the gains.
On the other hand, the non-OPEC crude oil production in third quarter 2020 is expected to witness some growth, particularly as of August. Non-OPEC liquids production in 2021 is revised up by 66 tb/d and is now expected to grow by 0.98 mb/d, mainly due to a better-than-expected recovery in production of Canada. Nevertheless, uncertainty surrounding financial and logistical constraints for US production, as well as a potential second wave of COVID-19 infections globally, remains a concern. OPEC crude oil production in July increased by 0.98 mb/d, month on month, to an average of 23.17 mb/d, according to secondary sources. Despite the dramatic drop in oil output in second quarter of 2020, particularly in OECD Americas, the non-OPEC liquids production growth forecast in 2020 (including processing gains) is revised up by 235 tb/d from the previous month’s assessment, due to a better-than-expected recovery in second half of 2020, and nowis expected to decline by 3.03 mb/d, yearly basis.
Outlook:- For the coming month, we are estimating Global Crude prices to trade mixed with the fall in the global demand forecasts on a monthly basis; even though OPEC supplies are expected to ease from the current month onwards. Moreover, major upside in Global Crude prices can be restricted with rising U.S. China trade tensions, second wave of Covid-19, recoveries from Iraq and worries about the Japanese economies. There is a possible decline in industrial demand that can happen once again amid fear of worldwide recession that may last longer after the OPEC reports for a decline in world economy by -4.0% for the year 2020, from its previous forecasts of -3.7%.
To Read Complete Report & Disclaimer Click Here
Please refer disclaimer at https://choicebroking.in/disclaimer
Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer