In a monthly report on Thursday, the Organization of the Petroleum Exporting Countries said demand would rise by 5.95 million barrels per day (bpd) this year, or 6.6 per cent. The forecast was unchanged for a second consecutive month.
The report’s forecast comes even after a slower-than-expected recovery in the first half of this year, and as it warns of “significant uncertainties,” around the pandemic, such as the potential emergence of new variants.
“Global economic recovery has been delayed due to the resurgence of COVID-19 infections and renewed lockdowns in key economies, including the Eurozone, Japan and India,” OPEC said in its monthly report.
“Overall, the recovery in global economic growth, and hence oil demand, are expected to gain momentum in the second half,” it said.
OPEC sees 2021 world economic growth at 5.5 per cent, unchanged from last month, assuming the impact of the pandemic will have been “largely contained” by the beginning of the second half.
Oil was trading above $72 a barrel before the report was released. The price has gained 39 per cent this year on rising demand and supply cuts by OPEC and its allies, known as OPEC+.
OPEC+ agreed in April to gradually ease oil output cuts from May to July and confirmed the decision at a meeting on June 1. Most of its output cuts will remain after July.
The efforts of OPEC+ have “have substantially led the way towards a market rebalance,” OPEC said.
The report showed higher OPEC oil output, reflecting the decision to pump more and gains from Iran, exempt from making voluntary cuts due to U.S. sanctions. Output in May rose 390,000 bpd to 25.46 million bpd, OPEC said.