The group’s latest Monthly Oil Market Report (MOMR) puts global oil demand at 96.46mn b/d this year, up by 190,000 b/d from its previous report and 5.95mn b/d higher than last year.
“The upward revision mainly takes into account a stronger economic rebound than assumed last month, impacting primarily OECD oil demand in the second half of 2021, supported by stimulus programmes and a further relaxation in Covid-19 measures, amid an accelerated vaccination roll out,” the report said. It sees the “bulk of consumption growth” this year taking place in the second and third quarters, when respective global demand will rise by 12.0mn b/d and 6.5mn b/d on the year.
But Opec revised lower its oil demand estimates for the first half this year because of new virus waves and resulting lockdowns in Europe, as well as “sluggish” first-quarter demand data for the non-OECD region. It said the “fragile” and uncertain recovery will require “vigilant monitoring of market developments”, which include the possibility of new Covid-19 variants, rising sovereign debt in most economies, and a potential further rise in inflation that may tighten monetary policies.
The report sees non-Opec liquids supply for 2021 at 63.83mn b/d, up by 930,000 b/d from 2020. The previous MOMR put non-Opec supply growth at around 950,000 b/d on the year. Opec expects US liquids supply to grow by 160,000 b/d on the year to 17.78mn b/d, but Opec said that higher oil prices could result in a further production increase this year.
Opec has revised higher the call on its own members’ crude by around 160,000 b/d from its previous projections to 27.42mn b/d. This is up by 4.94mn b/d from 2020. Opec crude production averaged 25.04mn b/d in March, up by 201,000 b/d from February according to secondary sources that include Argus.
Opec said that there have been “sizeable drawdowns” in global inventory levels since the middle of 2020, which it expects to continue in the coming months. Citing preliminary data, it said that OECD commercial stocks fell by 44.9mn bl in February from January to 2.978bn bl. This is up by 94.1mn bl from a year earlier, and 57mn bl above the 2015-19 average. In January, the Opec+ group recommended keeping the 2015-19 period as the basis for gauging the five-year average of OECD commercial oil stock levels, saying 2020 was an “exceptional year” that would distort the figures.
