OPEC still expects the global economy to accelerate in the second half of 2021, keeping its forecast of oil demand growth unchanged in its latest market analysis and pledging to remain vigilant to prevent prices from backsliding.
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OECD oil inventories, a metric the producer bloc tracks closely, have continued to draw but remain 34 million barrels higher than the 2015-2019 average it is targeting, OPEC said in its monthly oil market report on June 10. They were 25 million barrels below the five-year average in April, it said.
"The recovery in global economic growth, and hence oil demand, are expected to gain momentum in 2H21," OPEC said in the report.
The OPEC+ alliance's efforts "have substantially led the way towards a market rebalance. This foresight, along with an ongoing joint vigilant monitoring of developments, continues to support the oil market, in tandem with the expected recovery in the various economic sectors."
According to the analysis, OPEC's 13 members will be able to pump 28.66 million b/d in Q3 and 29.39 million b/d in Q4 without creating a supply surplus. The call on OPEC's crude for Q2 was revised up 600,000 b/d to 27.09 million b/d.
Secondary sources used by the bloc to monitor output estimated it produced 25.46 million b/d in May, according to the report, indicating room for OPEC and its partners to continue to relax their output cuts going forward.
Supply from outside of OPEC is forecast to average 63.73 million b/d in 2021, an increase of 840,000 b/d from 2020, OPEC said. The 2021 figure is a 130,000 b/d upward revision from last month's report, largely due to a faster-than-expected recovery in the US in March, OPEC said.
But overall US liquids supply will only grow 30,000 b/d year on year, with crude oil actually declining 100,000 b/d to 11.2 million b/d, according to the analysis.
Global oil demand will be 96.58 million b/d in 2021, up 5.95 million b/d from 2020 when the demand estimate was revised up to 90.63 million b/d.
"GDP growth rates in 2H21 are forecast to significantly exceed that of 1H21," OPEC said. "Global oil demand is also anticipated to pick up pace in 2H21, reaching 99 million b/d, compared to 94.1 million b/d in H1 2021, with improving mobility in major economies supporting gasoline and on-road diesel demand. Improvements in pandemic containment efforts and seasonal summer demand will allow for positive expectations for H2 2021."
The OPEC+ alliance, which collectively controls about half of global crude production capacity, is scheduled to meet online July 1 to assess market conditions and review plans to bring more output online.
The producers, which held almost 7 million b/d of production offline in April to speed the market's rebalancing, began significantly relaxing its output quotas last month through July, in anticipation of rising summer oil demand and a healthier global economy.