OPEC Upholds 6% Growth in Oil Demand as Nigeria’s Output Drops
The Organisation of Petroleum Exporting Countries, OPEC, upholds a 6% growth in oil demand forecast for 2021 to around 96.5 million barrels per day as Nigeria’s recorded a decline in output along with Angola. OPEC said this in its monthly oil report on Thursday.
Amidst an increased compliance with the OPEC quota, Nigeria output decline at the time when global prices of oil staying stronger following the pandemic.
Recall that the National Bureau of Statistics, NBS, said in the nation’s gross domestic product report for the first quarter that Nigeria’s output for the period printed at 1.72 million barrel per day on the average.
Lower-than-expected data from the Organisation of Economic Cooperative and Development (OECD) Americas and Europe in the first quarter of 2021 put downward pressure on annual demand projections.
However, positive mobility developments on the back of easing restriction measures and border openings across the region encouraged an upward revision to the second-quarter data, the report said.
Pointing to unforeseen developments from COVID-19 due to the emergence of new variants, the report did not rule out a possible negative outlook for the rest of the year.
However, the report said investor optimism, bolstered by accelerating COVID-19 vaccination in western countries along with easing mobility restrictions, overshadowed the deteriorating COVID-19 situation in several Asian countries in May, specifically India, and to a lesser extent in Japan.
The report further stressed a tightening of oil markets although investors remain optimistic about a further oil demand recovery during the summer holiday season.
It also underscored the decision of OPEC and non-OPEC producers to uphold market confidence by gradually adjusting production levels from May to July.
Demand for OPEC crude in 2021 is forecast to stand at 27.7 million bpd, which is 5 million bpd higher than in 2020.
OPEC crude Oil Production Jumps in May
Global oil production in May increased by 630,000 bpd compared to the previous month to average 93.67 million bpd, while reflecting a year-on-year rise of 5.63 million bpd.
The report shows that OPEC crude oil production increased by 39,000 bpd month-over-month to an average of 25.46 million bpd, while the share of OPEC crude out of total global production rose to 27% in May, marking a 0.2% decrease compared to the previous month.
Crude oil output increased mainly in Saudi Arabia, Venezuela and Iran, while production decreased primarily in Nigeria and Angola.
Raising its monthly crude oil production the most in May, the de facto leader of the OPEC group, Saudi Arabia, increased output by 345,000 bpd to 8.46 million bpd, mainly due to returning output after the OPEC+ decision to gradually phase out the country’s voluntary cuts over the last three months.
Venezuela, which has been exempted from OPEC’s production cuts, also boosted its production by 42,000 bpd to 531,000 bpd.
Iran, the other OPEC country that has had a production cut exemption, has seen output decline in May by 42,000 bpd to 2.5 million bpd.
Non-OPEC liquids production in May increased by 240,000 bpd compared with the previous month to an average of 68.21 million bpd.
OPEC Upholds 6% Increase in Oil Demand as Nigeria’s Output Drops
