World oil demand will fall more steeply in 2020 than previously forecast due to the coronavirus and there are doubts about next year’s recovery, OPEC forecast on Wednesday, potentially making it harder for the group and its allies to support the market.
World oil demand will tumble by 9.06 million barrels per day (bpd) this year, the Organization of the Petroleum Exporting Countries said in a monthly report, more than the 8.95 million bpd decline expected a month ago.
Oil prices have collapsed as the coronavirus curtailed travel and economic activity. While some countries have eased lockdowns, allowing demand to recover, fear of new outbreaks has kept a lid on prices and OPEC expects this to persist.
The report also forecast that demand for OPEC crude will be lower than expected this year and next, as supply increases from outside the group and because of the reduced demand outlook for 2020.
OPEC said demand for its crude this year will average 23.4 million bpd, down 400,000 bpd from the previous forecast. That suggests the market could move into surplus should OPEC’s output rise in August, as called for by the OPEC+ agreement.