There are indications that global demand for crude oil is swinging in the positive direction to grow by 6million barrel per day (mb/d) after its 9.3mb/d 2020 decline.
President of OPEC Conference, Diamantino Pedro Azevedo, stated this in his opening address to the meeting of the OPEC via videoconference in Vienna.
Azevedo noted that in the seven months since the last OPEC conference, the global economy has shifted from reverse to forward gear.
According to him, global growth is now expected at 5.5 percent this year – from a contraction of 3.4 percent in 2020.
Meanwhile, there was a bullish demand for crude causing Brent Crude to hit $76.49 per barrel from $75.32b/d.
“The outlook for worldwide oil demand is also moving in the right direction, and is now on course to grow by 6 mb/d in 2021, after its turbulent 9.3 mb/d decline last year,” he said.
He recalled that the latest OPEC Monthly Oil Market Report projects a strong rebound of oil demand in the second half of the year, putting oil exporters within striking distance of pre-pandemic levels in the fourth quarter.
He commended Nigeria and the Minister of State, Petroleum Resources, Chief Timiprye Sylva on the country’s 50th anniversary as a member of the organisation.
Global Energy Supplier
Azevedo said the golden milestone provides an opportunity to reflect upon Nigeria’s rise as a global energy supplier and partner; its pivotal support for oil market stability; and its contributions to expanding OPEC’s cooperation with other producing and consuming countries.You
He underscored the importance of Saudi Arabia’s additional voluntary adjustments, including those in February, March and April, which have reinforced and reaffirmed exporters’ overall efforts to keep the market on the road to recovery.
The OPEC President added that “Equally important, these generous contributions provided a window of opportunity for Participating Countries that needed extra time to make up for overproduction.
“Looking beyond the two-year duration of our April 2020 production adjustment roadmap, it will be important to carry on with the Declaration of Cooperation and our diligent monitoring efforts to avoid any potential for a large supply overhang developing in 2022”.
According to him, the exporting countries have experienced many false dawns during this pandemic, and though it is holding the meeting at a time of rising hope and optimism, this is no time to lower the guard.
He said the coronavirus continues to take a painful toll, with thousands of lives still being lost every day.
The President said the presence of the new Delta variant and the recent surge in case numbers in India, along with other Asian countries, Latin America, the UK and most recently Russia and Africa, are a grim reminder of the uncertainties that still loom over the globe.
Azevedo noted that the COVID was not the only worry of the OPEC, noting that economies now have heavy recovery baggage as inflationary hikes could undermine the progress of in the oil market.
He said: “The pandemic is not the only concern flashing on our radar screen. The record levels of fiscal and monetary stimulus that have helped shore up economies and drive the recovery come with heavy baggage – high debt levels and the potential for inflationary spikes that could in turn erode progress in the oil market.
“It is important to remember that many countries do not have the financial firepower to stimulate growth. They will continue to need international support so that the recovery is both durable and global”.