OPEC further cuts world oil demand forecasts

OPEC: 2020 world oil demand to decline by 9.46 million...

The feat was triggered after a tropical storm in the Gulf of Mexico compelled major U.S oil producers to shut down their oil rigs, but the upsurge in crude oil prices were capped by growing concerns about the falling demand for gasoline.

Brent oil futures edged up 0.15% to $39.89 by 10:05 PM ET (3:05 AM GMT), revering earlier losses.

"The storm is taking production offline in the Gulf of Mexico, and the market doesn't care - that shows just how bad the situation is", said Bob Yawger, director of energy futures for Mizuho in NY.

Yesterday, Tropical storm Sally, picked up its strength in the Gulf of Mexico, west of Florida, and was turning to become a category 2 hurricane.

Typically oil prices rise when production is shut down, but with the coronavirus pandemic getting worse, demand concerns are to the fore, while global supplies continue to rise. At same time OPEC raised its forecast for 2020 oil output, lifting its estimate for non-OPEC liquids production to rise 360,000 barrels a day to a higher recovery in US output in June.

The path towards global fuel demand recovery is likely to be rocky, several senior industry executives said.

Meanwhile, OPEC, which painted a gloomy picture of the market, has stated: "In 2020, the global oil demand contraction is revised down further by 0.4 mb/d, now contracting by 9.5 mb/d, to average 90.2 mb/d".

OPEC said in its monthly report that world oil demand would fall by 9.46 million barrels per day (bpd) this year, a decline sharper by 400,000 bpd than predicted in August.

The organisation, which disclosed this in its September 2020 Oil Market Report, obtained by Vanguard, said that the output was based on data collected from what it referred to as "direct communication", adding that the country's output remained at 1.4 mb/d when based on "secondary sources".



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