OPEC has lowered in a dramatic fashion, the forecast for demand growth of oil in the year and they have cited the outbreak of China’s coronavirus as the major reason behind this decision.
In a report which was watched very closely after it had been published on Wednesday, the producer group that is dominated mostly by the Middle-East has revised downwardly the outlook for the global demand of oil to a level of 0.99 million bpd in the year 2020. This is down in a major manner by 0.23 million bpd from the estimate of the last month.
The forecast has been amended and has been expected to reinforce these cases for the OPEC as well as the producers which are allied with OPEC including Russia for the imposition of more output cuts a lot sooner than was expected.
OPEC has said in a report that the impact of coronavirus outbreak on the economy of China has added to the uncertainties which surround the economic growth in the world in the year 2020 and by the extension of the global demand for oil in the year 2020.
The ongoing developments in China have required continuous assessment and monitoring for the gauging of the implications they have on oil markets in the year 2020.
The crude benchmarks have both seen a major fall of close to 20% after it climbed earlier in the month of January and has been dragged to a level lower by the concerns there are over the demand in China because of the coronavirus outbreak.
The demand of oil has been revised to being down by 0.2 million bpd in the year’s first half.