SAT 13 FEB, 2021-theGBJournal-OPEC expects oil demand to rise by 5.8 million barrels per day (bpd) this year, down by around 100,000 bpd from last month’s projection due to lockdowns in major developed economies in the first half of this year, the cartel said on Thursday.
‘’Extended lockdowns and the re-introduction of partial lockdowns in a number of countries has resulted in downward revisions to 1H21 projections. At the same time, positive developments on the economic front, supported by massive stimulus programmes, are expected to encourage demand in various sectors in 2H21,’’ OPEC said in its Monthly Oil Market Report for February 2021.
In the non-OECD, 2021 oil demand growth is forecast at around 3.3 mb/d, led by China. Recovery is also projected in other regions, particularly Other Asia, the Middle East and Latin America.
Light and middle distillates will be key to fuelling the growing petrochemical sector and supporting industrial activities, as well as gasoline for transportation.
‘’Developments in aviation and general travel will be important parameters for 2021 world oil demand. Indeed, the shock to the traditional relationship between GDP and oil demand that occurred in 2020 further clouds the short-term outlook,’’ OPEC said.
Meanwhile, the OPEC Reference Basket (ORB) increased for the third consecutive month in January to its highest since March 2020, rising along with higher related crude benchmarks and official selling prices, particularly of medium and heavy sour components for Asia. The ORB value rose $5.21 m-o-m, or 10.6%, to settle at an average of $54.38/b. All ORB component values rose in January, with West and North African Basket components – Bonny Light, Djeno, Es Sider, Girassol, Rabi Light, Sahara Blend and Zafiro – rising $4.92, or 10.1% m-o-m on average, to $53.66/b.
The multiple regions’ destination grades – Arab Light, Basrah Light, Iran Heavy and Kuwait Export – increased by $5.24, or 10.6% m-o-m on average, to settle at $54.68/b. Murban crude rose by $5.45, or 11.0% m-o-m on average, to settle at $54.93/b. The Merey component also rose by $4.70, or 14.4% m-o-m on average, to settle at $37.40/b.
The three major physical crude benchmarks rose for the third consecutive month to hit their highest monthly average since February 2020. In January, North Sea Dated increased by $4.99, or 10.0%, to average $54.73/b.
The WTI and Dubai first month rose respectively by $5.06 and $4.98, or 10.8% and 10.0%, to settle at $52.11/b and $54.76/b