OPEC maintains firm demand growth forecast for 2H 2021

London (Quantum Commodity Intelligence) – OPEC maintained its firm demand outlook Thursday, keeping 2021 world oil demand growth unchanged at 6 million barrels per day, led by the US and China as the global economy emerges from the pandemic.

"Global oil demand is anticipated to pick up pace in 2H 2021, reaching 99.0 million bpd, compared to 94.1 million bpd in 1H 2021, with improving mobility in major economies supporting gasoline and on-road diesel demand," said OPEC in its Monthly Oil Market Report.

OPEC said that OECD oil demand is anticipated to grow by 3.1 million bpd in the second half of the year, as oil demand gains traction, especially in OECD Americas, although stopping just short of full recovery to pre-pandemic levels.

Among non-OECD, oil demand is estimated to grow by 3.0 mb/d in 2H 2021 year-on-year, driven by China, India and other Asian economies.

"A healthy rebound in economic momentum is anticipated to stimulate industrial fuel demand, while demand for petrochemical feedstock is also projected to support demand growth in 2021," said the MOMR report.

OPEC also noted that the market continues to move back into balance, following the 2020 inventory glut.

"At 2,962 million barrels, inventories were 160 million barrels lower than the same month (April) a year ago, 25 million barrels below the latest five-year average, and around 34 million barrels higher than the 2015–2019 average."

Bringing down global inventories to the 2015-2019 average is a keystone policy of the OPEC+ producer group.

Oil prices remain firm with Asia benchmark Dubai crude for August delivery assessed at $70.65/b on June 10, while the market structure widened to a 17-month high of $1.10/b (Aug/Sep) on expectations of tightening supply/demand fundamentals in Q3.