Oil demand fell by a historic 9.8% in 2020

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OPEC warned this Thursday that new, more contagious strains of Covid, the increase in infections and the slow vaccination process can dampen the economic recovery and global demand for crude oil, at least in the first quarter of 2021.

Global oil demand fell by a historic 9.8% in 2020, to 90 million barrels per day (mbd), and will only recover Phone Number List part of that decline this year, while economic uncertainty continues in the early stages of 2021.

The Organization of Petroleum Exporting Countries (OPEC) calculates in its latest monthly report that the world burned an average of 90.01 mbd of crude oil, a slight increase of 20,000 barrels per day compared to calculations from a month ago.

For 2021, a partial recovery of the previous year's drop is expected, of 5.9 mbd, equivalent to 6.5%, the same figure as the previous month, although OPEC considers that the economic clouds persist at the beginning of 2021.

Economic uncertainty

"While a strong global economic recovery is very likely in 2021, the depth and magnitude of the rebound remains uncertain ," OPEC analysts assess.

"New virus variants have emerged, there is still a significant rise in infections - particularly in Western economies - and vaccination programs in large economies have gotten off to a slow start, factors that may dampen the recovery, at least in the first quarter. », they add.

Due to the shadows that still persist, OPEC has maintained its calculations for global economic growth in 2021 at 4.4%, despite considering that there is greater " upward potential ."

Major economies such as Germany, China, the United Kingdom and Japan have imposed new restrictions to contain new strains of Covid-19, while the speed of vaccination programs remains disappointing. In recent weeks, optimism about coronavirus vaccines seems to have lost strength in the face of negative news about the spread of the virus.

"Uncertainties remain high and the main downside risks are the problems related to Covid-19 containment measures and the impact of the pandemic on consumer behavior," the report states .

Recovery in the second quarter

All in all, OPEC believes that as time passes the vaccine will open a process of definitive reactivation of the world economy at the end of the second quarter and that it will gain momentum in the summer. "This impulse is expected to be led by consumption, especially in the services sector, and particularly in the areas of travel, leisure and hospitality ," consider the oil group's analysts.

The accumulation of purchasing capacity due to the months of confinement and monetary stimuli will help this rebound, which in the northern hemisphere will coincide with the summer season, according to the report. OPEC indicates that its forecasts for 2021 are based on "a vigorous recovery of economic activities, including industrial production, an improvement in the labor market and higher vehicle sales than in 2020. "




"Consequently, oil demand is expected to increase steadily this year, supported mainly by transportation and industrial fuels ," the group's experts conclude.

World production

Regarding oil supplies, OPEC competitors pumped an average of 62.69 mbd in 2020, a drop of 2.5 mbd due mainly to decreases in production in Russia, Canada and the United Kingdom. For 2021, it is estimated that they will produce an average of 63.53 mbd.

The volume of barrels that the world demanded in 2020 from the thirteen members of OPEC stood at 22.2 mbd this year, 7.1 mbd less than in 2019, and is estimated to rise to 27.2 mbd in 2021. according to the report.

OPEC and a group of allies, led by Russia, decided last May to withdraw 9.7 mbd from the market to address the collapse in prices due to the coronavirus crisis. This cut moderated to 7.7 mbd in August and was eased again in January by 0.5 mbd, to 7.2 mbd.

In February it was planned to reduce the cut by another half a million barrels, but the expansion of infections and new restrictions in numerous countries stopped that possibility.

After marathon negotiations, the energy ministers of OPEC+, the alliance between the organization's thirteen partners and ten allied producers, agreed on January 5 to reduce their supply by more than 900,000 mbd, although this was only due to unilateral action. and volunteer from Saudi Arabia.

Riyadh will close its taps on one million barrels per day during February and March, months in which it will pump 8.25 mbd, while Russia and Kazakhstan increase their extractions by 65,000 and 10,000 barrels per day, respectively.