OPEC expects global economic growth to sustain oil demand

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Islamabad

Opec left its global oil demand forecast for 2021 unchanged in its monthly outlook report, due to an economic rebound in the second half of the year but the bloc sees energy consumption in India, the world’s third-biggest consumer of oil, collapsing because of the surge in Covid-19 infections.

The group maintained its global demand forecast for 2021, which sees an increase of 6 million barrels per day to average 96.5 million bpd for the year, according to its monthly market report.

The rising number of infections in top energy-consuming countries such as India and Brazil will weigh on demand in the first half of the year.

Slower-than-anticipated consumption in the Americas region of Organisation for Economic Cooperation and Development countries in the first quarter also impacted Opec’s earlier forecast.

However, these developments are likely to be offset by “positive weekly transportation fuels data from the US and the acceleration in vaccination programmes” in the second half of the year, Opec said.

“The assumed return to normality and improved mobility will also positively influence regions such as the Middle East and Other Asia,” the group said.

However India, one of the fastest growing demand centres for crude, is expected to curtail its demand over the coming months.

The South Asian nation has emerged as a Covid-19 hotspot, with local, highly infectious strains of the virus spreading rapidly across the country.

India has registered nearly 23 million cases so far, according to Worldometer, which tracks the pandemic.

The government has been reluctant to impose a nationwide lockdown similar to the curbs implemented last year, which severely crimped its overall demand for crude and led its economy to shrink 8 per cent in 2020. —Agencies

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