GENEVA — The global economic growth forecast remains at minus 4.1 percent for 2020, while for 2021 it is revised downward to 4.6 percent, from 4.7 percent in last month’s assessment, according to OPEC monthly oil market report.

"In 2021, the world oil demand forecast was adjusted lower by 0.08 mb/d compared to last month’s report. This downward adjustment is due to the slower economic growth projected for both the OECD and non-OECD. Nevertheless. the forecast for oil demand growth stands at around a solid 6.5 mb/d, with global total demand estimated to reach 96.8 mb/d. While the demand forecasts expect growth of 4.6 percent in global economic activity, risks related to the COVID-19 pandemic and its impact remain a considerable concern, " the report which was released on Tuesday explains.

It estimated 2020 world oil demand to decline by 9.5 mb/d y-o-y, relatively unchanged from last month’s assessment, reaching a level of 90.3 mb/d.

"In the OECD, demand growth is revised slightly lower by around 0.06 mb/d in 2020. This downward revision accounts for lower expectations for transportation fuel consumption in the US and parts of Europe in 2H20 following a weak summer driving season, which has more than offset a less-than-expected decline in 1H20 data, due to steady petrochemical feedstock demand in the US and increased heating fuel restocking in Europe. In the non-OECD, oil demand in 2020 was adjusted slightly higher, by around 0.05 mb/d m-o-m, due to better-than-expected demand from China," the report which was released today explained."

The report expects light distillates (including LPG/NGL/naphtha) and diesel to be supported by improving industrial activity and capacity additions in the petrochemical sector, mainly in China and the US next year.

"All products are projected to see growth, given the current year’s low demand levels. On the other hand, oil demand growth in 2021 is expected to be capped by a number of factors, including the increase in teleworking and distance education; reduced international business and leisure travel; efficiency gains in the transportation sector; oil substitution policies in power generation; and reduced fuel subsidies." — WAM