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OPEC sticks to 2021 oil demand growth forecast despite Indian COVID crisis

Published 11/05/2021, 12:20
Updated 11/05/2021, 12:24
© Reuters.
LCO
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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.
The Organization of the Petroleum Exporting Countries
expected demand to rise by 5.95 million barrels per day (bpd)
this year, or 6.6%, its forecast unchanged from last month.
The oil organisation, however, cut its demand forecast for
the second quarter by 300,000 bpd.
"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.
Oil LCOc1 was trading close to $68 a barrel before the
report was released. Prices have risen to pre-pandemic highs
above $71 this year, boosted by hopes of economic recovery and
OPEC+ cuts, although concern about Indian demand has weighed.
OPEC in the report raised its forecast of 2021 world
economic growth to 5.5% from 5.4% seen earlier, assuming the
impact of the pandemic will have been "largely contained" by the
beginning of the second half of the year.
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.

(Editing by Gabriela Baczynska)

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