OPEC slashes global oil demand forecast over COVID-19 outbreak

The Organisation of Petroleum Exporting Coun tries (OPEC), on Wednesday said its Global forecast market demand for oil would grow more slowly than expected in 2020 because of the Coronavirus (COVID-19) outbreak.

The revision comes as OPEC and 10 additional oil producers led by Russia are mulling to take a further output cut in reaction to the outbreak at their meeting on March, 2019, in Vienna.

OPEC said global crude oil demand would expand by 990,000 barrels per day (bpd) to average 100.73 million bpd in 2020, which was 230,000 bpd less than the 14-country group had projected in January.

According to the cartel’s monthly market report, the demand for oil from OPEC countries would therefore, be 200,000 bpd lower in 2020 than previously expected.

“The outbreak of the Coronavirus in China during the first half of 2020 is the major factor behind this downward revision,” the report said.

The OPEC analysts noted that the spread of the Covid-19 disease affected demand for transporting fuel at China’s peak travel season for the Lunar New Year, as well as industrial sector in the world’s second biggest economy.

OPEC added that the outbreak would also slow down global economic growth in 2020.

However, its total oil output fell by 509,000 bpd to 28.86 million bpd from December to January, slightly reducing the cartel’s global market share to 28.8 per cent.