By Adedapo Adesanya
Despite the shocks that plagued the oil market last year, a semblance of good news has materialised for Nigeria and other oil-producing nations under the Organisation of the Petroleum Exporting Countries (OPEC) as the group sees a strong recovery in world oil demand in 2021.
In a monthly report, the cartel said demand will rise by 5.95 million barrels per day this year equivalent to 6.6 per cent, a signal that is unchanged from last month despite worrying cases of coronavirus cases in high importing nations like India and Japan.
According to the report, Business Post understands that the growth in China and the United States will counter the coronavirus crisis in India, which is the major source of worry for the market presently.
The report’s optimism comes even as it warns of significant uncertainties, mainly around the pandemic, and as concern about India weighs on oil prices.
“India is currently facing severe COVID-19-related challenges and will therefore face a negative impact on its recovery in the second quarter, but it is expected to continue improving its momentum again in the second half of 2021,” OPEC said in its monthly report.
India’s continues to record higher new COVID-19 cases breaking the previous day’s record and this has led oil refiners in the third-largest consuming nation to reduce crude processing rates.
Due to this, the positive outlook won’t pick up until the second half of the year as the group cut its oil demand forecast for the second quarter by 300,000 barrels per day.
The improvement comes from the third quarter as it raised its estimate for the third quarter by 150,000 barrels per day and by 290,000 barrels per day for the fourth quarter of the year.
OPEC now sees 2021 world economic growth at 5.5 per cent up from 5.4 per cent last month, assuming the impact of the pandemic will have been largely contained by the beginning of the second half.
