OPEC expects steeper oil demand drop

Shafaq News/ World oil demand will fall more steeply in 2020 than previously forecast due to the COVID-19 and recover more slowly than expected next year, OPEC said on Monday, potentially making it harder for the group and its allies to support the market, Reuters reported.

World oil demand will tumble by 9.46 million barrels per day (bpd) this year, the Organization of the Petroleum Exporting Countries said in a monthly report, more than the 9.06 million bpd decline expected a month ago.

Oil prices have collapsed as the COVID-19 crisis has curtailed travel and economic activity. While some countries have eased lockdowns, allowing demand to recover, a rising number of new cases and higher oil output have weighed on prices.

OPEC also cut its demand forecast for 2021 and sees consumption rising by 6.62 million bpd, 370,00 bpd less than expected last month.

As by Reuters, to tackle the drop in demand, OPEC and its allies, known as OPEC+, agreed to a record supply cut of 9.7 million bpd that started on May 1, while the United States and other nations said they would pump less.

In the report, OPEC said its output rose by 760,000 bpd to 24.05 million bpd in August, as the 9.7 million bpd cut tapered to a reduction of 7.7 million bpd from Aug. 1.

That amounted to 103% compliance with the pledges, according to a Reuters calculation - up from July’s figure of 97%.