OPEC on Thursday slashed its oil demand growth forecast further due to the coronavirus outbreak, which put oil and fuel demand under heavy pressure. The group also agreed to cut production further to support prices from declining amid weakness in oil demand resulting from the epidemic.
In December 2019, OPEC’s estimates for the growth stood at 1.1 million bpd. However, the coronavirus outbreak forced OPEC to reduce its forecasts to 990,000 bpd in February. OPEC now forecasts global oil demand to grow by just 480,000 bpd in 2020.
Meanwhile, the International Energy Agency forecast that oil consumption would shrink in the first quarter of 2020. IEA also slashed its forecasts on 2020 global oil demand growth by 365,000 bpd to 825,000 bpd.
To battle the prices tumble, OPEC has proposed to cut production by further 1.5 million on top of the current production cuts. However, the group still needs support from Russia and other non-OPEC partners.
