World oil demand has been projected to tumble by 9.46m barrels per day this year, more than the 9.06mbpd decline expected a month ago, the Organisation of Petroleum Exporting Countries said in a monthly report.
Oil prices have collapsed as the Coronavirus Disease curtailed travel and economic activities.
While some countries have eased lockdowns for economic recovery, a rising number of new cases and higher oil output have weighed on prices.
OPEC said of the 2021 outlook, “Risks remain elevated and tilted to the downside, particularly related to the development of COVID-19 cases as well as possible cures.
“Increased usage of teleworking and distance conferencing is estimated to limit transportation fuels from fully recovering to 2019 levels.”
Demand is expected to rebound more slowly than expected next year, even as OPEC sees consumption rising in 2021 by 6.62mbpd, 370,00bpd less than expected last month.
Oil stocks have built up due to the demand collapse. OPEC said inventories in developed nations fell by 4.5m barrels in July, but stood 260.6m barrels above the five-year average, a yardstick that OPEC, before the pandemic, saw as a desirable level.
Prices of crude have fallen by almost 15 per cent so far this month, below levels that many OPEC members need to balance their budgets.
To tackle the drop in demand, OPEC and its allies known as OPEC+ agreed to a record supply cut of 9.7mbpd that started on May 1, while the United States and other nations said they would pump less.
In the report, OPEC said its output rose by 760,000bpd to 24.05mbpd in August, as the 9.7mbpd cut tapered to a reduction of 7.7mbpd from August 1.
A monitoring panel of OPEC+ ministers will meet on Thursday to discuss the market. Some delegates have voiced concern about the drop in prices this month although there are no signs yet that the group is planning to tweak the supply pact.
