OPEC foresees many downside risks in oil markets for the first half of 2021, Secretary General Mohammad Barkindo said before a meeting between OPEC and its allies (OPEC+).
“Amid the hopeful signs, the outlook for the first half of 2021 is very mixed and there are still many downside risks to juggle,” he said.
OPEC+ have been cutting production in an effort to balance supply and demand, the importance of which was highlighted during the coronavirus pandemic, when demand for oil plummeted. The initial cut of 9.7 million barrels per day (bpd) has already been eased to 7.7 million bpd, and the group are planning a gradual rise of 2 million bpd this year, with 0.5 million bpd increase starting in January.
With continued uncertainty about the outlook for the year, it is unclear if OPEC+ will be able to continue boosting supply, and the organisation plans to meet on a monthly basis to reassess market conditions.
“Curbs on social and economic activity remain in place in a number of countries, and there is concern about the emergence of a pernicious new strain of the virus,” Barkindo said.
OPEC expects global oil demand to be led by developing countries, rising to 95.9 million bpd in 2021, up 5.9 million bpd from 2020. This follows the forecast of global economic growth of 4.4%.
