OPEC is optimistic that accelerating vaccination programs and rising fuel demand will raise global oil demand by 5.95 million barrel per day (bpd) this year despite the current COVID crisis in India, the cartel said on Tuesday, keeping its demand outlook unchanged from last month.
World oil demand is set to average 96.5 million bpd in 2021, OPEC said in its closely-watched Monthly Oil Market Report (MOMR) today. This would be nearly 6 million bpd higher than the demand last year, with the acceleration expected in the second half of 2021.
OPEC revised down its estimates for global oil demand for the second quarter by 300,000 bpd due to lower-than-expected demand in North America in the first quarter and the COVID resurgence in India and Brazil. However, the organization raised its outlook for oil demand for both the third and fourth quarters of 2021 by 150,000 bpd and 290,000 bpd, respectively. The higher anticipated demand in the second half of this year is the result of positive fuel data from the United States, while “the acceleration in vaccination programs in many regions allows for optimism,” OPEC said.
Regions such as the Middle East and Asia except China are also expected to benefit from some sort of return to normality in the second half of 2021.
Among developed economies, the biggest contributor to demand will be the United States and North America as a whole, although demand is not expected to return to pre-crisis levels this year.
“Rebounding transportation fuels, mainly gasoline, in addition to healthy light- and middle-distillate requirements are assumed to support the oil demand recovery going forward,” OPEC noted.
Non-OPEC supply for this year was revised down by 230,000 bpd, mainly due to the Texas Freeze in February. OPEC now sees the total oil supply from non-OPEC nations growing by 700,000 bpd year over year in 2021.
By Tsvetana Paraskova for Oilprice.com
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