Global oil demand is expected to increase by 6.41% to an average of 96.05 million barrels per day (bpd) in 2021, the Organization of Petroleum Exporting Countries (OPEC) said in its OPEC Monthly Oil Market Report on Thursday.
"For 2021, positive developments were evident across major economies, specifically in the US, supporting demand for petroleum products, particularly industrial fuels," the report said, clarifying that the majority of this positive economic impact is assumed to gain traction during the second half of the year.
However, the report underlined that this positive outlook was offset by expectations for a weaker recovery in transportation fuels in the first half of the year, as COVID-19 infection cases remain high in regions such as the US, Europe and Latin America. This has led to governments imposing new lockdown measures, or deepening existing ones, to help control the spread of the virus.
"Additionally, a slower rollout of vaccinations is assumed to further delay herd immunity targets in some countries and regions, and the appearance of new variants in many countries has only added to the uncertainties," it added.
According to the report, based on the assumption that vaccination campaigns will help stem the spread of COVID-19 and that the announced massive stimulus programs will have a positive impact, a stronger growth rate is expected from transportation fuels in the second half of the year.
Demand for OPEC crude in 2021 has been revised up by 300,000 bpd from the previous month to stand at 27.5 million bpd, which is 5 million bpd higher than in 2020.
-OPEC crude oil production rises in January
Global oil production in January rose by 430,000 bpd compared to the previous month to average 93.12 million bpd, although it reflected a year-on-year fall of 7.33 million bpd.
In January, OPEC crude oil production rose by 181,000 bpd month-over-month to average 25.5 million bpd, according to the report.
As a result, the share of OPEC crude out of total global production rose to 27.4% in January, marking a 0.1% increase compared with the previous month.
Crude oil output increased mainly in Saudi Arabia, Venezuela and Iran, while production decreased primarily in Libya, Nigeria and Iraq.
Before voluntarily adjusting its production lower by an additional 1 million bpd in February and March, Saudi Arabia was the country among OPEC members that raised its monthly crude oil production the most in January with an increase of 89,000 bpd to reach 9.054 million bpd.
Exempted from OPEC's production cuts, Libya's production, however, fell by 51,000 bpd to 1.164 million bpd.
Non-OPEC liquids production in January increased by 25,000 bpd compared with the previous month to average 67.62 million bpd.
By Sibel Morrow