OPEC downgrades oil market recovery forecast

US, WASHINGTON (ORDO NEWS) — The Organization of Petroleum Exporting Countries (OPEC) has worsened the forecast for market recovery: the estimate of oil demand in 2020 was reduced by another 2.2 million barrels per day, according to the OPEC monthly report.

As a result, a decrease of 9.07 million b / s is expected. In 2019, demand was 99.67 million bpd. Some countries are cutting production faster, while others are not fulfilling an agreement to reduce production.

According to estimates by the International Energy Agency (IEA), oil demand in April is 29 million bps lower than a year ago, and in May it will be 26 million less. The IEA expects the situation to stabilize in the second half of 2020: “Oil shortages will appear on the market, which will complete the period of stockpiling and allow for a return to more normal market conditions.”

OPEC and its allies, led by Russia, together with the acceding countries, promised to reduce the oil market by 9.7 million barrels per day starting May 1 as part of the OPEC + deal. 23 countries agreed to reduce production by a total of 9.7 million barrels per day.

Another 9 countries outside OPEC + announced plans to reduce production to support the deal. Oil producers outside the OPEC + alliance have announced a reduction in oil production by 3.6 million barrels per day.

If everyone keeps their promises, then the reduction in production can reach 15-20 million barrels per day. Participants in the OPEC + deal in early June will discuss the market situation and the implementation of the agreement to reduce production. Russia and Saudi Arabia are confident in the implementation of the OPEC + agreement.

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