The Organization of the Petroleum Exporting Countries (OPEC) has further lowered its forecast on oil demand due to the coronavirus pandemic, casting doubts on 2021’s recovery, according to Reuters.
An OPEC report has predicted that world oil demand will tumble by 9.06 million barrels per day (mmbbl/d) this year, more than the original prediction in July of a 8.95 mmbbl/d decline. The reasoning behind further lowering predictions is due to fears of a second wave in a multitude of countries, which will curtail travel and economic activity somewhat.
OPEC said in the report, “Crude and product price developments in the second half of 2020 will continue to be impacted by concerns over a second wave of infections and higher global stocks.”
Another reason for the lowering global demand is also due to the huge pile of oil stocks that have built up due to the collapse in demand. OPEC said inventories in developed nations rose in June to stand at 291.2 million barrels above the five-year average.