OPEC is revising down its 2021 oil demand growth estimate, delegates said March 30, in a sign that the producer group and its allies will continue to tread cautiously with returning more crude to world markets.
OPEC's secretariat had previously forecast demand growth of 5.9 million b/d in its latest oil market report on March 11, but an advisory committee has determined that the projection was overly optimistic, delegates told S&P Global Platts on condition of anonymity.
The new forecast has yet to be determined. The OPEC+ group will meet April 1 to determine May production quotas.
"We considered that the figures on the demand side need to be revised to take into account the latest developments on the market and not the sentiment of the first [half] of March," one delegate said, citing the third wave of infections in Europe that have led to new lockdown measures, delays in some vaccine rollouts, new coronavirus variants identified in India and signs of a slowdown in Chinese economic growth.
Faltering oil prices in recent days after a weeks-long surge to nearly $70/b have many analysts anticipating that the so-called OPEC+ group may largely roll over its quotas for at least another month.
The alliance's current quotas are keeping more than 7.1 million b/d of crude production off the market, with Saudi Arabia adding an extra voluntary 1 million b/d cut on top.
Under the terms of its agreement, the bloc can adjust output caps by up to a collective 500,000 b/d each month.
Platts Analytics is forecasting 5.8 million b/d of demand growth in 2021.
OPEC Secretary Mohammed Barkindo told a delegate-level Joint Technical Committee that met March 30 that "while last month saw many positive developments, it also witnessed reminders of the ongoing uncertainties and fragility caused by the COVID-19 pandemic," according to a statement.