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The International Energy Agency (IEA) cuts its expectations for the global demand for crude oil during 2021 by 280,000 barrels per day (b/d) to 5.5 million b/d, according to the monthly report released on Tuesday.
A decline of 600,000 b/d is expected during the first quarter (Q1) of the year, while Q2 of 2021 is expected to a decrease of 300,000 b/d, compared with the IEA’s previous estimates.
The modified expectations were attributed to the resurgence of the Coronavirus pandemic with a rising number of new cases, re-imposing preventive measures and lockdowns to curb the spread of the deadly virus in many parts across the world.
It is worth noting that the Organization of the Petroleum Exporting Countries (OPEC) and other top producers, forming an alliance known as OPEC+, recently reached an agreement to curb output in February, as suggested by Saudi Arabia, with the Kingdom voluntarily choosing to apply larger production cuts.
The OPEC+ alliance is set to hold monthly meetings to agree on production policy in accordance with market developments as the world continues to face the implications of the pandemic.
