LONDON (ICIS) – Crude oil demand will remain well below pre-pandemic levels this year as a significant pickup in air traffic is unlikely to happen until at least 2022, OPEC said on Tuesday.
However, the crude oil cartel said road traffic is increasing in the OECD – the 37 most industrialized countries, including most of Europe and the US – which is supporting demand for gasoline.
“In the US, data for the first quarter of 2021 showed that overall losses in gasoline consumption are lower compared to the previous months, which means that the impact of Covid-19 on gasoline demand is gradually decreasing, while data on fuel consumption are well below that stay normal. Said the OPEC.
“In addition, the easing of restrictions and increased demand expected in the traditional summer driving season should further fuel global gasoline demand.”
Even if the summer months in the northern hemisphere were better than currently expected and additional restrictions were lifted earlier than planned, gasoline consumption would remain below the values registered in the period July to September 2019, OPEC said.
The cartel has made only minor changes to its forecasts for crude oil demand this year and next. After the demand for crude oil reached 100 million barrels per day in 2019, the average demand after 2020 was 90.5 million barrels per day according to the latest estimates for 2020.
The expected recovery in demand growth of 6 million barrels per day in 2021 would only bring the annual average to 96.5 million barrels per day.
Crude oil prices have remained in the region of USD 60 / barrel since the start of the year as the Russian-led production cuts in OPEC and non-OPEC countries reduced inventories.
However, analysts believe that crude oil prices may have peaked as the electrification of transport takes hold and crude oil becomes indispensable only for raw materials from the petrochemical industry.
Despite the recent decline in inventories, the world remains inundated with oil, despite OPEC saying its production cuts are working and are helping to reduce the imbalance.
“This reduction in overstocking, as well as an expected revival in product demand, will pave the way for a cautious recovery in the oil market equilibrium in the summer months and support refining margins and throughputs,” said OPEC.
