OPEC slashes 2020 oil demand view on coronavirus
The Organization of the Petroleum Exporting Countries expects global demand to rise by just 60,000 barrels per day in 2020, a reduction of 920,000 from its previous forecast
AFP
Tuesday, 14 April 2020
OPEC slashed its forecast for global growth in oil demand this year due to the coronavirus outbreak and said more revisions might follow, underlining the deepening impact of the virus on the market days after a pact on output cuts collapsed.
The Organization of the Petroleum Exporting Countries expects global demand to rise by just 60,000 barrels per day (bpd) in 2020, a reduction of 920,000 bpd from its previous forecast, it said in a monthly report.
The report’s release follows the March 6 collapse of a pact on output cuts between OPEC and non-OPEC producers led by Russia. The prospect of burgeoning oversupply has sent oil LCOc1 down by 28% to $36 a barrel since March 5, losing OPEC members up to $500 million a day.
OPEC expects a greater impact on demand than the U.S. government’s Energy Information Administration, which on Wednesday cut its 2020 world oil demand growth forecast by 660,000 bpd to 370,000 bpd.
OPEC, Russia and other producers, a group known as OPEC+, had since Jan. 1 implemented a deal to cut output by 1.7 million bpd to support the market.
Three years of cooperation by OPEC+ producers ended in acrimony after Moscow refused to support deeper oil cuts to cope with the coronavirus outbreak. OPEC responded by removing all limits on its own production.