Sept. 14 (UPI) — The decline in global oil demand due to the COVID-19 pandemic will be deeper and last longer than previously thought, OPEC said in a new outlook Monday.
The group’s monthly oil market forecast predicts overall demand for 2020 will be 400,000 fewer barrels per day than last month’s estimate, mainly due to declining demand in India.
OPEC said it now foresees a reduction in demand of 9.5 million barrels per day for 2020, to just over 90 million barrels per day.
The pandemic’s negative impact will also “spill over” into the first half of 2021 due to a slower-than-expected recovery in transportation fuel demand in economically developed nations, the group said.
For 2021, global demand is forecast to grow by 6.6 million barrels per day, a smaller amount than last month’s OPEC forecast projected.
Non-OPEC producers are also expected to increase output and the global economic growth estimate was lowered slightly to minus 4.1% for 2020.
Analysts say the bearish outlook will likely increase pressure on OPEC members and allies to maintain steep production cuts imposed in May, when they ordered a record cut of 9.7 million barrels per day.
The cuts helped oil prices rebound from 21-year lows in April to about $40 per barrel this week.