World's 2020 oil demand growth virtually eliminated over COVID-19: OPEC

OPEC reduced the growth in world demand for oil from 990,000 barrels per day to 60,000 bpd, a 93 per cent drop.

The Organization of Petroleum Exporting Countries (OPEC) has announced that there would be practically no increase in the worldwide consumption of crude oil in 2020 due to the coronavirus impact on the global economy.

In its monthly report published on Wednesday, OPEC reduced the growth in world demand for oil from 990,000 barrels per day to 60,000 bpd, a 93 per cent drop, Efe news reported.

It calculated that the volume of crude that the world will need from the 13 cartel partners will be reduced this year by 5.8 per cent - or 1.73 million bpd - compared with 2019 to 28.18 million bpd.

"Following a considerably weaker economic growth for 2H19 in Japan, Euro-zone and in India, the COVID-19 related developments necessitated a further downward revision of the 2020 GDP growth forecast to 2.4 per cent from 3.0 per cent forecast in the previous month. This compares to a 2019 GDP growth estimate of 2.9 per cent... Further downside risks to the world economy remains given the uncertainty regarding the magnitude of COVID-19 related impacts," said OPEC in the report.

The estimates were based on the "adverse effects" that the epidemic have already had on transportation and on the industrial use of fuel in China, as well as on petroleum consumption in other regions hit by the coronavirus, including Japan, South Korea, Europe and the Middle East.

At this point, OPEC calculates that this year the total demand for crude will not exceed, in contrast to its earlier estimates, the psychological barrier of 100 million bpd, but rather will remain at an average of 99.73 million bpd provided that the world recovers relatively quickly from the crisis surrounding the spread of the virus.