In its monthly oil market report today, the Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for 2020 global oil demand by 400,000 barrels, from 90.63 million barrels per day to 90.23 mb/d.
This new estimate for 2020 would mark a 9.5% decline to 2019’s level of oil demand:
In addition, OPEC downwardly revised its forecast for 2021’s global oil demand by 770,000 barrels, from 97.63 million barrels per day to 96.86 mb/d.
Because of 2020’s aberrantly weak levels of oil demand, however, this lower figure of 96.86 mb/d for 2021 would still mark a 7.34% year-over-year increase:
One would think this news would have those with an exposure to “black gold” shivering. But the spot prices for both Brent Crude and Western Texas Intermediate were actually flat for the day:
The futures curve, however, continues to arch itself into a still-deeper contango:
The spread between front month and illustrates this curve-steepening in greater detail:
There’s also quite a difference between OPEC’s forecasts and those that come from its western counterparts:
Maybe the flatness in today’s oil prices is due to market participants being “non-believers” in OPEC’s forecasts?
For more on oil, check out today’s Real Vision Daily Briefing, where I discuss OPEC’s monthly report and more with senior editor Ash Bennington.
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