The Coronavirus Disease led to consumers stockpiling extra $5.4tn in savings, the Organisation of Petroleum Exporting Countries has said.
OPEC’s Secretary General, Dr Mohammad Barkindo, at the 51st Virtual Meeting of the Joint Technical Committee on Monday, added that consumer confidence was beginning to rally.
“For the first quarter of this year, the Conference Board said global consumer confidence index hit the highest level since its records began 16 years ago,” Barkindo said.
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He noted that Moody’s, a credit rating agency, had reported that if consumers were to spend just a third of these excess savings, global output could be boosted by two per cent.
“At 18.3 per cent, China’s first quarter economic growth in 2021 has simply been staggering. The contrast with the 6.8 per cent contraction in the first quarter of 2020 reflects a remarkable post-pandemic surge. Big infrastructure projects are fuelling this growth,” he explained.
According to Barkindo, this has further generated positive momentum with regard to oil demand.
“In our most recent Monthly Oil Market Report, world oil demand growth 2021 is expected to increase by about six million barrels per day year-on-year, representing an upward revision of about 0.1mb/d from previous month’s report.
“We also received very good news regarding the inventory glut that amassed during the pandemic. Commercial oil inventories in the Organisation for Economic Co-operation and Development stood just 77mb above their 2015 to 2019 average as of March, down from a peak of 249 million in July.”
Barkindo further said this was a remarkable turnaround from April 2020, when the world was fretting about running out of storage.
“The revival of fortunes for the health of the economy and our industry is due, in no small part, to the efforts of the ‘Declaration of Cooperation’ partners. What has been particularly apparent about this group over the last year is how responsive we have been to the fast-changing environment.
“For all involved in this great enterprise, it has been extremely reassuring to know that the decision-making process has been informed by the quality analysis and data provided by this esteemed committee, supported by the OPEC Secretariat,” he said .
Barkindo noted that despite the positive developments, the world was far from putting the pandemic behind.
“The pace it took to reach this number is extremely concerning. It took nine months for the world to see one million fatalities; another four months for a second million to succumb; and just three more months for the three million milestone to be reached,” he added.
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