World oil demand will rebound more slowly in 2021 than previously thought as coronavirus cases rise, OPEC said on Tuesday, adding to headwinds faced by the group and its allies in balancing the market.
To tackle the drop in demand, OPEC and its allies including Russia, a group known as OPEC+, agreed to a record supply cut of 9.7 million bpd starting on May 1.
The cut was tapered to 7.7 million bpd in August and OPEC+ plans further tapering next year by boosting supply by 2 million bpd from January.
In the report, OPEC said its output fell by 50,000 bpd to 24.11 million bpd in September. That amounted to 104 percent compliance with the supply cut pledges, according to a Reuters calculation -- up from August’s figure of 103 percent.
OPEC also forecast demand for its crude will be 200,000 bpd lower than expected next year at 27.93 million bpd.
Assuming global demand rebounds as expected, this in theory leaves room for OPEC members to increase output in 2021 by over 3.8 million bpd from September’s rate without causing a glut.