The Organisation of Petroleum Exporting Countries (OPEC) upgraded its expectations for global oil demand growth in 2021 Tuesday on expectations of a growth rebound, as the oil-producing countries’ organisation plans to lift output in the months ahead.
The monthly report’s forecast of a year-on-year increase by six million barrels per day (bpd) was slightly higher than a March prediction, which had already been upgraded.
Such an increase would push global demand to 96.5 million bpd in 2021 after last year’s tumble due to coronavirus restrictions.
“Oil demand in the second half of 2021 is projected to be positively impacted by a stronger economic rebound than assumed last month, supported by stimulus programmes and a further easing of Covid-19 lockdown measures,” OPEC said.
Further cause for optimism later this year came from “an acceleration in the vaccination rollout, largely in the OECD region” — although many developed economies’ performance in the first half has proven sluggish.
Convened under the OPEC+ alliance, which also includes Russia and others, oil producers decided in April to gradually roll back output cuts initially made to shore up prices.
The move was motivated by rising optimism as coronavirus vaccination campaigns picked up steam.
OPEC’s own output grew by 0.2 million bpd last month, to just over 25 million, according to indirect sources cited in the report.
Most of the growth came from a boost to Iranian production.
While Iran remains far short of output levels seen several years ago, it is in talks in Vienna to save an international deal under which the US agreed to lift some sanctions in exchange for curbs on Tehran’s nuclear programme.