OPEC and IEA raise forecasts for 2021 oil demand

16 Apr 2021

Key forecasts for the recovery of global oil demand in 2021 have been upgraded amid growing economic optimism and the acceleration of coronavirus vaccination programmes.

Over the course of 2020, global oil demand fell by an unprecedented 8.7m barrels per day (bpd), triggering months of low prices that are only now beginning to return to pre-pandemic levels.

Brent crude and West Texas Intermediate are now both priced above US$60 per barrel, having dipped to historic lows of US$20 and minus US$38 per barrel last year respectively.

In its monthly update, the IEA said it expects oil demand to grow by 5.7m bpd this year to 96.7m bpd – a 230,000 bpd upgrade to its previous forecast.

However, the agency cautioned of ‘lingering concerns’ over the strength of this recovery, with signs of COVID-19 cases rebounding in some key markets, including Europe, Brazil and India.

In its own monthly oil market review, OPEC also made a small upwards revision of 190,000 bpd to its expectations for 2021 demand growth, estimating an increase of six million bpd over the year to reach 96.5m bpd.

But ‘risks will remain high’ during the year, the oil exporter group said, subject to COVID-19 developments and the pace of reaching immunity targets.

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