From Joy Ekeke, Lagos 

The Organisation of Petroleum Exporting Countries (OPEC) has projected 6.2 million barrel per day (bpd) growth in oil demand in 2021, stating that the news of a third trial of covid-19 vaccine is spurring up hopes of economic recovery.

According to the OPEC Secretary General, Mohammad Barkindo, the outlook for 2020 oil demand is now slightly above 90 million bpd.

“This represents a sharp decline of nearly 10 million b/d from where we started the year, and almost an 11million b/d contraction compared to what we forecast in January.

“In 2021, we expect growths to bounce back to 6.2 million b/d to just over 96 million b/d, compared to our pre-Coronavirus (COVID-19) expectations for demand reaching almost 102 million b/d next year.

“The recent revisions are due to the easing pace of the economic recovery and recent COVID-19 containment measures, which are assumed to impact transportation and industrial fuel demand well into next year,” Barkindo said.

He said that the crucial market rebalancing efforts were further complicated by high stock levels.

He said that preliminary data for October, showed that total Organisation for Economic Cooperation and Development (OECD) commercial oil stocks were 208 million barrels above the latest five-year average.

This, he said, was compared to 13 million barrels below the five-year average in January.

The OPEC scribe noted that the total global inventories have surged by more than one billion barrels since the beginning of 2020.

“These figures would have been dramatically higher and clearly unsustainable had it not been for the unprecedented cooperative efforts taken to address the imbalance in fundamentals and stabilise the market,” he said.

Barkindo further said that in spite the current outlook, crude oil would continue to be relevant in the foreseeable future, up to 2045.

He said that oil demand was expected to rise by almost 10 million bpd from 2019’s levels to around 109 million bpd in 2040, and then begin to plateau.

” Non-member countries of the OECD will be the growth powerhouse and members will account for around 68 per cent of overall oil demand by 2045, with the economic tigers of India and China leading this growth.

In absolute terms, we expect oil demand in the developing and emerging economies rising by 22.5 million bpd to around 74 million bpd in 2045.

“The outlook for crude oil may look anaemic now, but we anticipate a gradual normalisation of demand growth as the world recovers from the COVID-19 shock.

” Our analysts foresee global oil demand returning to relatively robust annual growth and reaching nearly 104 million bpd by 2025,” he said.

He said that in the longer term, there are a few factors that would drive consumption, such as population and economic growth, especially in developing and emerging economies.

” We expect the global economy to be more than double from 2019 to 2045, to 258 trillion dollars and the population to grow by at least 20 per cent, to 9.5 billion.

“Simply put, our world will continue to thirst for energy. The World Oil Outlook anticipates that oil will remain the dominant fuel in the global energy mix for the foreseeable future, accounting for a nearly 28 per cent share in 2045, followed by gas at around 25 per cent.

“It is important to point out that it is the mainstream consensus of the leading reporting agencies that oil and gas will retain their prominence in the energy mix for the foreseeable future.” Barkindo said.

He expressed optimism that the promising vaccine developments, apart from the hope that they could quickly be brought to market to save lives, could also help reboot the global economy.

“Nonetheless, the oil market today is overshadowed by the resurgence of COVID-19 and a slower pace of economic recovery than we had envisioned in the second half of the year.

” In this respect, our OPEC outlook for 2020 oil demand is now slightly above 90 million bpd,” he stated.

Barkindo added that OPEC’s outlook showed that petrochemicals and transportation would drive demand for crude oil going forward.

He said that electricity generation was the only area expected to see a decline, as oil gives way to renewables and natural gas