Opec has cut its forecast for the global oil market for the year, amid faltering demand and a weaker-than-expected recovery in India and other Asian countries.
The group of oil-producing nations downwardly revised its outlook to an average of 90.2m barrels per day in 2020. It is down 400,000 bpd from August’s estimate and reflects a drop of 9.5m bdp year-on-year.
For non-OECD countries, the outlook is revised lower by around 500,000 barrels per day due to weaker demand particularly in India, and the negative impact is likely to spill into the first half of next year.
“The speed of recovery in economic activities and oil demand growth potential in other Asian countries, including India, remain uncertain,” it said.
Opec, alongside non-Opec allies, will meet this week whether the vast cuts to production have been effective in staving off an oil glut.
The alliance has agreed to cut output by 7.7m bdp until the end of the year.
It comes as companies become increasingly worried about the economic recovery and a drop-off in fuel demand as a result of the pandemic.
Brent crude slipped below $40 a barrel, close to their lowest point in more than two months, as companies like BP made gloomy predictions about oil demand.
The energy giant said demand for oil may have already reached its peak and faces an unprecedented decline.
In its annual energy report, BP said demand may never fully recover from the hit it took from the pandemic, and may begin falling for the first time in modern history.
Earlier this year, chief executive Bernard Looney said he would “not write off” the possibility that coronavirus would bring forward a decline in oil demand.