The forecast of growth in oil demand in the world for 2020 was revised downwards by 6.9 mb d, to a historical drop of around 6.8 mb/d, by the OPEC .
Unusually, on April 20, 2020, the price for the futures contract for the immediate month (May) of West Texas Intermediate (WTI), the United States benchmark crude, was negative.
OPEC expects the contraction in the second quarter of this year to be around 12 mb/d, with April being the worst contraction of approximately 20 mb/d.
Oil demand
Overall, the impact of the COVID-19 outbreak in China in the first quarter, and its negative impact on transportation and industrial fuels in the country, has spread globally and is now impacting growth in oil demand. in most other countries and regions, with an unprecedented impact on world oil demand, particularly on transportation fuels.
As a result, OECD oil demand was revised downwards by 3.7 mb/d to decrease by 4.0 mb/d, while growth in non-OECD oil demand was adjusted downwards by 3.2 mb/d to contract at 2.9 mb/d for the year, according to OPEC estimates.
Taking into account recent developments and large uncertainties in the future, downside risks remain significant, suggesting the possibility of further adjustments, especially in the second quarter, in the event that new data and subsequent developments warrant revisions.
Global supply
Growth in non-OPEC oil supply in 2019 slowed by 0.01 mb/d from the previous month’s assessment and is now estimated at 1.98 mb/d.
For 2020, the Organization forecasts that oil supplies outside OPEC will decrease by 1.50 mb/d, a downward revision of 3.26 mb/d from the previous projection.
On the one hand, the impact of COVID-19, the consequent global economic recession and the shock of oil demand, will also cause interruptions in supply.
On the other hand, the fall in benchmark oil prices prompted companies to respond by reducing capital spending to the lowest in 13 years.
The 2020 oil supply growth forecast for the United States was revised downward by 1.05 mb / d to show a decrease of 0.15 mb/d yy.
The growth in supply for the 10 non-OPEC countries participating in the Declaration of Cooperation has also been adjusted downward.
Oil supply in 2020 is now forecast to show growth only in Norway, Brazil, Guyana and Australia.
OPEC’s LGN production in 2019 is estimated to have grown by 0.04 mb/d at an average of 4.79 mb/d and by 2020 it will grow by 0.04 mb/d at an average of 4.83 mb/d.
In March, OPEC crude oil production increased by 821 tb/d m-o-m to an average of 28.61 mb/d, according to secondary sources.
