According to internal OPEC research seen by Reuters, the group is concerned if the second wave of coronavirus occurred, as it could bring the efforts to rebalance the global oil market and solve the worst glut in history to no avail.
The Organization of Petroleum Exporting Countries (OPEC) saw that in the next year, global oil demand to climb by 7 million bpd after falling by 9 million bpd in 2020. The group also has set a target of an additional 6 million bpd of output coming online in 2021.
However, the group’s internal research showed that the targets are in jeopardy if the second wave of the pandemic prompted new lockdowns around the world.
Demand could shrink by 11 million bpd this year, leading to a rise in inventories of 1.218 billion barrels. The number is equal with putting into storage the equivalent of more than 12 days of global oil output.
Under this scenario, the third quarter of this year would fail to post a drawdown in stocks while in the fourth quarter, only a modest decline would be seen, about 149 million barrels more than the five-year average in the OECD countries. OPEC targets to keep stockpiles at or below the level.
OPEC’s current scenario expected OECD inventories staying at 104 million bpd below the five-year average of its own region by the end of this year.
