The Organization of the Petroleum Exporting Countries (OPEC) revised down its forecast of global oil demand for 2020, predicting a 9.07 million barrels per day (b/d) year-on-year contraction in its monthly report published on Wednesday.
The Organization for Economic Co-operation and Development (OECD) oil demand was revised lower by 1.20 million b/d, while non-OECD oil demand growth was adjusted down by 1.03 million b/d, for total oil demand to reach 90.59 million b/d, according to the report.
Crude oil prices recorded a second sharp monthly drop in April amid an increasing oil surplus, it said. The OPEC Reference Basket (ORB) value plummeted by 16.26 U.S. dollars per barrel, or 48.0 percent month-on-month, to 17.66 dollars per barrel, the lowest monthly level since December 2001.
The report expected that the worst contraction in major oil demand centers around the world to take place in the second quarter of 2020, mostly in OECD Americas and Europe, with transportation and industrial fuels affected the most.
It pointed out that demand contraction in 2020 can be mitigated with sooner-than-expected easing of COVID-19 restriction measures and faster response of economic growth to stimulus packages.
OPEC also predicted that the world economy will decline by 3.4 percent in 2020, following global economic growth of 2.9 percent in 2019.
The U.S. economy is forecast to contract by 5.2 percent, while an even larger decline is expected in the Euro-zone, where economic activity is forecast to fall by 8.0 percent in 2020.
China's 2020 GDP is forecast to grow by 1.3 percent, recovering from a sharp contraction in the first quarter.
Russia's economy is forecast to contract by 4.5 percent in 2020, not only due to COVID-19, but also because of the considerable decline in oil prices.
