WED, AUG 12 2020-theG&BJournal– Organisation of Petroleum Exporting Countries (OPEC) said on Wednesday in its monthly (August) report that global oil demand growth in 2020 is forecast to decline by 9.1 mb/d mainly due to lower economic activity levels in a few major non-OECD countries. This is 0.1 mb/d lower than last month’s forecast.
Total oil demand is now projected to reach 90.6 mb/d, OPEC said. For 2021, world oil demand growth is forecast to rise by 7.0 mb/d, unchanged from last month.
Total world consumption is now pegged at 97.6 mb/d in 2021. The forecast assumes that COVID-19 will largely be contained globally, with no further major disruptions to the global economy. Consequently, economic activities are projected to rebound steady in both OECD and non-OECD.
Spot crude oil prices rose further in July, the third consecutive monthly increase. The OPEC Reference Basket (ORB) averaged $43.42/b in July, gaining $6.37 over the previous month to reach its highest value since February this year.
The ORB year-to-date average is $39.85/b. Crude oil futures also rose in July, again for the third consecutive month. ICE Brent ended the month $2.45 higher at $43.22/b, while NYMEX WTI rose by $2.45 to reach $40.77/b.
The Brent-WTI spread remained unchanged at $2.46/b. Futures prices rose given continued improvement in oil market fundamentals and bullish economic data.
All three futures market structures were in contango in July, with the forward curves steepening late in the month. Hedge funds and other money managers turned less positive on oil prices by the end of July, cutting their bullish bets on crude oil futures and options close to two-month lows.