The OPEC oil cartel said Thursday that the world market for crude is undergoing an unprecedented jolt due to coronavirus mitigation measures that have decimated demand.
“The oil market is currently undergoing a historic shock that is abrupt, extreme and at global scale,” said the group of producer nations in its latest monthly report.
The cartel now forecasts a “historical drop” of around 6.8 million barrels per day (mbd) in average daily demand for 2020.
It sees worse contraction of about 20 mbd in April.
Those forecasts are less severe than those released on Wednesday by the International Energy Agency, a Paris-based organisation that advises major energy consuming nations.
It forecast the drop in demand in April to be around 29 mbd, and 9.3 mbd overall in 2020.
OPEC and its allies struck a deal at the weekend to scale back output by around 10 mbd, but oil prices have not rallied as traders see it as insufficient given the magnitude of the drop in demand.
You have reached your limit for free articles this month.
Register to The Hindu for free and get unlimited access for 30 days.
Subscription Benefits Include
Find mobile-friendly version of articles from the day’s newspaper in one easy-to-read list.
Enjoy reading as many articles as you wish without any limitations.
A select list of articles that match your interests and tastes.
Move smoothly between articles as our pages load instantly.
A one-stop-shop for seeing the latest updates, and managing your preferences.
We brief you on the latest and most important developments, three times a day.
Not convinced? Know why you should pay for news.
*Our Digital Subscription plans do not currently include the e-paper ,crossword, iPhone, iPad mobile applications and print. Our plans enhance your reading experience.