World oil demand in 2021 will rebound more slowly than previously thought, OPEC said on Thursday, adding to a series of downgrades as the impact of the pandemic lingers.
Demand will rise by 5.79 million barrels per day (bpd) this year to 96.05 million bpd, the Organization of the Petroleum Exporting Countries said in a monthly report, trimming its growth forecast by 110,000 bpd from a month ago.
The prospect of a weaker demand recovery has already prompted OPEC and its allies, a group known as OPEC+, to slow the pace of its scheduled oil output boost in 2021.
These curbs have helped boost oil prices, which hit a 13-month high this week.
“While the global economy is showing signs of a healthy recovery in 2021, oil demand is currently lagging, but is forecast to pick up in the second half of 2021,” OPEC said in the report.
OPEC has steadily lowered its 2021 oil demand growth forecast from 7 million bpd expected in July. Still, the latest forecast is stronger than the prediction made in an internal OPEC report seen this month by Reuters.
The group raised its forecast of world economic growth this year to 4.8 per cent from 4.4 per cent previously, despite the impact of “challenges” such as COVID-19 variants and the effectiveness of vaccines.
“The global vaccination rollout is gaining pace, infection rates are falling in some areas, improvements in treatment and the growing use of rapid testing facilities all lend support to an acceleration of economic activity after the first quarter,” OPEC said.
OPEC+ producers cut supply by a record 9.7 million bpd last year to support the market.
They agreed to pump an extra 500,000 bpd in January under a plan to unwind the curbs gradually. Most producers are returning to supply restraint this month and in March.
The report said OPEC crude production in January rose by 180,000 bpd to 25.50 million bpd.
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