OPEC Reduces 2020 Crude Demand by 2.23 Million BDP

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Mfame Team
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  • Price of a barrel has dropped -0.93% from a high of $26.94 bbls to a low of $25.27 bbls.
  • OPEC members are scrambling to do more to stabilize prices.
  • Oil futures finished at a five-week high on expectations of falling production levels.
  • OPEC reduced its forecast for 2020 crude demand by 2.23 million barrels a day.
  • It is expecting oil demand to drop by 9.07 million barrels a day this year.
  • A 3.5 million bpd decline in non-OPEC production to an average of 61.5 million bpd.

According to an article published in FXStreet, the price of a barrel of oil mid-week has dropped -0.93% from a high of $26.94 bbls to a low of $25.27 bbls in West Texas Intermediate crude.

OPEC scrambles to stabilize prices

However, it has not all been one-way traffic as investors presume that the fact oil demand is plummeting, the Organization of the Petroleum Exporting Countries (OPEC) will have to do more to stabilize prices.

Oil futures finished at a five-week high on expectations that falling production levels, as well as gradual demand in nations seeking to open their economies up from several weeks of lockdown, would support higher prices going forward.

However, with a combination of a tear in the US dollar pertaining to Federal Reserve Jerome Powell’s comments sinking in as well as OPEC further cutting its forecast for global oil demand in 2020, oil prices were once again back in the red.

OPEC reduced its forecast for 2020 crude demand

  • In its monthly report, OPEC reduced its forecast for 2020 crude demand by 2.23 million barrels a day from its April projection, now expecting oil demand to drop by 9.07 million barrels a day this year.
  • What has also rattled the market is the revision of non-OPEC liquids production down by a “huge“ 2 million barrels a day from its previous assessment.
  • A 3.5 million barrel a day decline in non-OPEC production to an average 61.5 million barrels a day in 2020 is a major hit for the market, for both upstream and downstream participants, especially in Noth America.
  • However, the outlook and forecasts were made for worldwide production, including Canada (300,000 barrels a day), Brazil (100,000 barrels a day).

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Source: FXStreetNews