UPDATE 1-OPEC pins oil demand hopes on second-half recovery as India dents Q2

Published 11/05/2021, 13:40
Updated 11/05/2021, 13:42
© Reuters
LCO
-

* Keeps 2021 oil demand growth forecast at 5.95 mln bpd
* OPEC April output rises by 30,000 bpd on Iran
* Sees higher demand for its crude as Texas freeze hits US
supply

(Adds details on non-OPEC supply, demand, context, quote)
By Alex Lawler
LONDON, May 11 (Reuters) - OPEC on Tuesday stuck to its
prediction of a strong recovery in world oil demand in 2021 as
growth in China and the United States counters the coronavirus
crisis in India, an outlook that bolsters the group's plan to
gradually ease output cuts.
In a monthly report, the Organization of the Petroleum
Exporting Countries said demand will rise by 5.95 million
barrels per day (bpd) this year, or 6.6%. The forecast was
unchanged from last month.
The report's optimism comes even as it warns of "significant
uncertainties," mainly around the pandemic, and as concern about
India weighs on oil prices. Crude LCOc1 fell after the report
was released but is still up 30% this year at near $68 a barrel.
"India is currently facing severe COVID-19-related
challenges and will therefore face a negative impact on its
recovery in the second quarter, but it is expected to continue
improving its momentum again in the second half of 2021,"
OPEC said in its monthly report.
India's seven-day average of new COVID cases hit a record
high on Tuesday. Oil refiners in the country - the third-largest
consumer - are reducing crude processing rates. In the report, OPEC cut its oil demand forecast for the
second quarter by 300,000 bpd, and raised its estimate for the
third quarter by 150,000 bpd and by 290,000 bpd for the last
three months of 2021.
OPEC now sees 2021 world economic growth at 5.5%, up from
5.4% last month, assuming the impact of the pandemic will have
been "largely contained" by the beginning of the second half.
"The recovery is very much leaning towards the second half,"
OPEC said.

LOWER NON-OPEC SUPPLY
OPEC and its allies, known as OPEC+, agreed in April to
gradually ease oil output cuts from May, after the new U.S.
administration called on Saudi Arabia to keep energy affordable
for consumers. The report also showed slightly higher OPEC oil output
already as Iran, exempt from making voluntary cuts due to U.S.
sanctions, pumped more in April, driving a 30,000 bpd rise in
the group's output to 25.08 million bpd.
OPEC+ cut supply by a record 9.7 million bpd last year to
support the market as demand collapsed. Most of those curbs
remain in place even after the April decision.
In the report, OPEC also raised its estimate of how much oil
it needs to pump this year, citing the impact on U.S. output of
the Texas freeze. Non-OPEC supply is now expected
to rise by 700,000 bpd, down from 930,000 bpd last month.
As a result, OPEC raised its estimate of global demand for
its crude to 27.7 million bpd this year, up 200,000 bpd from
last month and allowing for higher average OPEC production in
2021.

(Editing by Gabriela Baczynska and Carmel Crimmins)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2024 - Fusion Media Limited. All Rights Reserved.