The group’s latest Monthly Oil Market Report (MOMR) sees global oil demand reaching 96.27mn b/d this year, up by 5.89mn b/d from 2020. The previous report pegged this year’s demand growth at 5.79mn b/d. Opec said it has lowered its expectations for oil demand in the first half of the year because of the impact of the Covid-19 pandemic and high unemployment rates in the US. But it has revised higher its demand projections for the second half of the year to reflect expectations for a stronger economic recovery and progress in vaccination programmes.
Opec said the speed of recovery depends on the near-term path of the pandemic. And uncertainties and challenges remain surrounding the effectiveness of vaccines against mutations, as well as high sovereign debt levels, which could increase interest rates and cause “severe fiscal strain”, it said.
The report sees non-Opec liquids supply at 63.8mn b/d this year, up by almost 1mn b/d from 2020 and 470,000 b/d higher than its previous estimate. The key drivers for supply growth this year are expected to be Canada, the US, Norway, Ecuador and Brazil, Opec said. But it expects upstream capital spending this year to remain “well below” 2019 levels as a result of lower projected investment in US shale. It forecasts a 100,000 b/d decline in US tight crude output compared with 2020.
Opec has revised down the call on its members’ own crude by 200,000 b/d from previous projections, to 27.26mn b/d this year. This is up by 4.86mn b/d from 2020. Opec crude production averaged 24.85mn b/d in February, down by 647,000 b/d compared with January, according to an average of secondary sources including Argus.
Citing preliminary data, Opec said OECD commercial oil stocks fell by 11.3mn bl in January from December to 3.05bn bl. This is up by 138.7mn bl from a year earlier and 125.7mn bl above the 2015-19 average. In January, the Opec+ group recommended keeping the 2015-19 period as the basis for the latest five-year average of OECD commercial oil stock levels, saying 2020 as an “exceptional year” would distort the figures.
