The world oil demand will hit a record high next year. This will most likely be a record annual increase of 7 million barrels per day. This was according to the Organization of the Petroleum Exporting Countries (OPEC). However, this historic rebound driven by the expected economic recovery will be insufficient to restore global oil consumption to the level before the crisis triggered by the coronavirus pandemic.
In the latest edition of its monthly bulletin, the organization predicts that global demand for crude oil will fall in 2020 to 90.72 million barrels per day. Concerning the consumption of 2019, it is a slightly less pessimistic figure than in its previous estimate.
Still, oil consumption in 2021 will remain well below the pre-COVID-19 level
However, relying on the momentum of the economic recovery expected in 2021, OPEC expects that, next year, there will be a record annual increase of 7 million barrels per day in oil demand, up to 97.72 million barrels per day. This figure is still below the average consumption in 2019, before the pandemic.
In 2021, there are forecasts that oil demand will partially recover from the current year. They predict it would show historical growth with an increase in both OPEC and non-OPEC regions. The growth prediction was at 3.5 million BPD a year. This was according to OPEC. The group warns that, in any event, oil consumption in 2021 will remain well below the pre-COVID-19 level.
In its projections, the organization anticipates that demand from OPEC countries in 2021 will rise to 46.47 million BPD from the 42.96 million BPD forecast for 2020. It includes growth in Europe from 12.59 million BPD in 2020 up to 13.80 million BPD. Meanwhile, in the United States, it will reach 20.50 million BPD next year. This is in comparison to the estimated 18.99 million BPD for 2020.
The organization warns that the prospects for 2021 continue to depend on considerable uncertainties, both upward and downward. This is in terms of economic growth and the effectiveness of the stimulus measures implemented. The coronavirus pandemic’s evolution and the need to impose restrictions again will play a big part in it.
On the other hand, the group underlines that historical cooperation between OPEC member countries and non-OPEC countries, together with the support of other G20 producers, has helped the world oil market.
Historic decisions made amid considerable uncertainty have made a substantial contribution, paving the way for the recovery of global energy and economic markets in 2021, OPEC maintains.
The world economy will shrink by 3.7% this year
OPEC contemplates that the world economy will suffer a contraction of 3.7% in 2020, three tenths worse than previously anticipated. This is a consequence of a more noticeable impact of Covid-19 in some emerging economies, followed by a 4.7% recovery in 2021.
The US GDP is projected to fall by 5.2% in 2020, followed by a 4.1% growth in 2021. Meanwhile, in Europe, the economy is forecast to decline by 8% in 2020 to rebound by 4.3% in 2021. China, for its part, will grow this year by 1.3%, followed by growth of 6.9% in 2021.