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Global oil demand will soar by a record 7 bpd in 2021:OPEC

OPEC oil
Oil prices in 2020 have collapsed due to an oil price war and the coronavirus pandemic

Demand for crude oil will increase by a record of 7 barrels of oil per day (bpd), according to the Organisation of the Petroleum Exporting Countries (OPEC).

OPEC expects the global economy to recover from the Covid-19 crisis next year and also the oil market, however, it would stay below 2019 levels.

This was the first report in which OPEC accessed the oil market for next year.

According to the OPEC reports, there will be no downside risks materialising in 2021 such as US-China trade tensions, high debt levels or a second wave of coronavirus infections.

OPEC said in the report, “This assumes that COVID-19 is contained, especially in major economies, allowing for recovery in private household consumption and investment, supported by the massive stimulus measures undertaken to combat the pandemic.”

Crude oil prices this year has collapsed significantly after an oil price war erupted between Saudi Arabia-led OPEC and Russia. Also, global demand fell by a third when governments across the globe imposed lockdowns, sealed borders and grounded flights to stop the spread of the virus.

OPEC will also be holding a meeting with its allies today with regard to future level of output cuts. Reportedly, OPEC and its member which include Russia are set to decide whether to extend output cuts of 9.7 million bpd that end in July or ease them to 7.7 million bpd.

Amrita Sen, co-founder of the think tank Energy Aspects told the media, “I think OPEC is betting that some of the wells that were shut in don’t come back due to reservoir damage in non-OPEC countries. But OPEC isn’t immune to declines either.”

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