On Thursday night, OPEC released its monthly Crude Oil market report, in which the organization raised its forecast for global crude oil demand growth in 2021 to 5.89 million bpd from 5.79 million bpd. The forecast for overall non-OPEC supply growth in 2021 was raised to 0.95 million bpd, compared with the previous forecast of 0.67 million bpd.
The monthly report showed that OPEC crude oil production fell by 650,000 bpd to 24.85 million bpd in February. Saudi Arabia reported data showing that the country produced 8.147 million bpd in February, down 956,000 bpd from the previous month. The market outlook is set to soften due to supply constraints. 46.3 million barrels of OECD stocks were above the five-year average level in January.
The organization said continued embargo measures, maintaining social distance and other restrictions related to the outbreak continue to put pressure on economic activity. However, the situation will improve in the second half of 2020.
According to secondary sources, Iran’s crude oil production increased by 35,000 barrels per day to 2.12 million barrels per day in February; Saudi Arabia’s crude oil production decreased by 930,000 barrels per day to 8.15 million barrels per day in February; and Nigeria’s crude oil production increased by 161,000 barrels per day to 1.488 million barrels per day in February.
OPEC’s monthly report showed that net imports of petroleum products in the U.S. increased by 585,000 bbl/d to 449,000 bbl/d in February 2021 compared with the previous round of statistics; net imports of petroleum products in India decreased by 373,000 bbl/d to 4.50 million bbl/d in January 2021 compared with the previous round of statistics; net imports of petroleum products in China increased by 1.845 million bbl/d to 10.661 million bbl/d in January-February 2021 compared with the previous round of statistics. 10.661 million barrels per day (bpd).
The report, published on Thursday, confirms that OPEC is not worried about the overheating of the oil market. Compared to last month’s report, OPEC lowered its forecast for the total amount of crude it needs to supply this year by 250,000 barrels per day to an average of 27.26 million barrels per day.
With the organization’s production significantly below that level, it should be able to manage to deplete the excess oil stocks that built up during the Epidemic.
By the end of the first half of the year, economic activity is expected to accelerate as the impact of the epidemic is expected to wane, the organization wrote in its report. This momentum will be supported by pent-up demand, particularly in contact-intensive service sectors such as travel and tourism.
This could allow OPEC to resume partial production cuts, which currently stand at about 8 million barrels per day, or about 8 percent of global supply, including further cuts by Saudi Arabia.