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The Head of OPEC expects an increase in oil demand in 2021

30-11-2020

On Monday, the President of the Organization of Petroleum Exporting Countries (OPEC) and Algerian Energy Minister Abdelmajid Attar expressed his expectations for an increase in oil demand by 6.1 million barrels per day in 2021 in addition to the return of the global economy to growth by about 4.4 percent. This came in an opening speech delivered by Attar in front of the 180th Ministerial Conference of Oil Ministers (OPEC) currently being held via remote communication technology. Attar said that this brighter outlook for 2021 gives cautious optimism and is a clear indication that we are on the right track. He added, the year 2020 is still full of enormous challenges caused by (Covid 19) pandemic which led to heavy losses in the way of living. He pointed out that the pandemic negatively impacted the global economy and consequently the global energy markets in an unprecedented way. He pointed out that global oil demand for 2020 is expected to decrease by 9.8 million barrels per day as the second wave of the pandemic and related closures hindered demand. In related context, the Algerian Minister of Energy revealed that there is a consensus at the level of the organization on the necessity of extending the ceiling for reducing the production of (OPEC Plus) countries which is represented by 7.7 million barrels per day until the end of March 2021 provided that the organization’s partners are persuaded to adopt this option during a meeting tomorrow. Attar said in a media statement after the ministerial meeting that this option was studied during today’s meeting, noting that although some countries expressed reservations , he is optimistic about adopting the decision to extend the current ceiling to reduce production from all countries of the organization through the calls he made with various stakeholders. He stressed, if the (OPEC) countries do not continue the same efforts that embarked on seven months ago, this could pose a danger to the oil market. Attar indicated that in the event that the extension option is adopted, the (OPEC) and its allies can hold an emergency meeting next March in order to implement the ceiling agreed upon in the production cut agreement which could be 5.8 million barrels per day. He stressed that “the option of (OPEC) countries to extend the ceiling currently applied to reduce production is due to the risks that still exists regarding the effects of the Corona pandemic on the oil market. It is noteworthy that the (OPEC Plus) alliance will hold a meeting on Tuesday to discuss the conditions of the global oil market and the prospects for its development in the short and medium term. In addition to evaluating the implementation and the level of compliance with the commitments of voluntary reduction of the countries signatories to the Declaration of Cooperation as decided by the Ministerial meeting of (OPEC) and non-OPEC countries on April 12th.