Global liquids production in June decreased significantly by 2.95 million barrels per day (bpd) to average 86.29 million bpd, the Organization of Petroleum Exporting Countries (OPEC) said in its report on Tuesday.
In June, OPEC crude oil production decreased by 1.89 million bpd month-over-month to average 22.27 million bpd, according to secondary sources quoting from OPEC's Monthly Oil Market Report for July.
Non-OPEC liquids production in June, including OPEC non-gas liquids (NGLs) and non-conventional liquids, is estimated to have fallen by 1.06 million bpd from the previous month to average 64.02 million bpd.
As a result, the share of OPEC crude out of total global production decreased by 1.3 percentage points to 25.8% in June relative to the previous month.
Equatorial Guinea was the country among OPEC members that raised its crude oil production most in June from the previous month with an increase of 24,000 bpd to reach 114,000 bpd.
Saudi Arabia, Iraq and Venezuela were the OPEC members that saw their crude oil production levels decline the most in June, with the former two lowering their output as part of the OPEC deal in April to support prices against the novel coronavirus (COVID-19).
While Riyadh cut its crude output by 923,000 bpd to approximately 7.55 million bpd in June, Iraq lowered its production by 449,000 bpd to around 3.71 million bpd, and Venezuela saw its output decline by 199,000 bpd to 356,000 bpd.
- Oil demand to rise in 2021
Global oil demand in 2020 is estimated to be 8.95 million bpd lower than 2019 to average 90.72 million bpd this year. However, it is expected to increase by 7 million bpd next year to average 97.72 million bpd in 2021.
Thus, demand for OPEC crude in 2021 is anticipated to be 6 million bpd higher than this year to average 29.8 million bpd in 2021.
Regarding the expected decline in global oil demand this year, OPEC factored in “concerns about the spike of COVID-19 cases worldwide and potential impact on economic activity and oil demand.”
It said the “outbreak of COVID-19 pandemic had an unprecedented and devastating impact on the global economy and oil market fundamentals in 2020."
The COVID-19 pandemic, which began in the first quarter of 2020, has quickly spread around the world, causing a recession in the global economy as well as an unprecedented shock in global oil demand, leading to a large supply glut on the oil market.
By Ovunc Kutlu