The Organization of the Petroleum Exporting Countries (OPEC) in its July Monthly Oil Market Report (MOMR) estimated global oil demand to drop by 8.9 million bpd in 2020, revised up by 0.1 million bpd OPEC’s previous MOMR. The upward adjustment was based on higher-than-expected oil demand from the OECD region in Q2, which offset the downward revision to non-OECD oil demand during the same period.
OPEC revised up demand growth forecast for OECD countries to 42.96 million bpd thanks to better-than-expected data for diesel in OECD Europe and the Asia Pacific, as well as for petrochemical feedstock in OECD Americas. Despite the upward adjustment, OECD oil demand will still be lower than 47.88 million bpd last year. Meanwhile, the forecast on oil demand growth in the non-OECD region was revised lower by 0.1 million bpd due to weaker-than-expected demand in some countries, including India, Indonesia, Thailand, and Singapore during H1.
Total global oil demand is estimated to reach 90.7 million bpd this year, with higher demand expected in H2 than H1. As a reference, the world consumed approximately 99.67 million bpd of crude last year. In 2021, oil demand is projected to recover with historically high growth of around 7.0 million bpd year-on-year. Total liquids demand is expected to reach 97.7 million bpd next year1. Despite such an increase, global oil demand will remain lower than pre-pandemic levels.
OPEC noted that its projections for this and next year are subject to unusually high uncertainty, especially about economic data, including unemployment rates, governments’ stimulus size and effectiveness, as well as sectoral recovery in the manufacturing and service sectors. It is also still hard to predict the direction of the COVID-19 pandemic developments.
