crude oil price
Barely a week after agreeing to stagger its output increases in 2021 along with its partners in the alliance, the Organization of the Petroleum Exporting Countries (OPEC) has projected a decrease in global world demand for crude oil by 9.77 million bpd for the rest of 2020. This is higher than the previous forecast of 9.75 million barrels per day. The cartel projected global crude oil demand to grow by less than expected, projecting demand to rise by only 5.9 million barrels per day as opposed to the prior forecast of 6.25 million barrels per day.
OPEC says that the lower demand for 2021 is a continued reflection of the uncertainty of the coronavirus pandemic on the use of transport fuel use by OECD countries and the forecast of a mild winter, which reduces the demand for heating oil (a derivative of crude oil).
However, the cartel was optimistic about the possibility of coronavirus vaccination programs providing some uplift in growth forecasts for 2021.
The release of the downgraded demand forecasts immediately put crude oil prices on the Brent and WTI benchmarks under selling pressure. Brent crude is currently trading 0.54% as of the time of writing.
Crude oil price on the Brent benchmark continues to struggle in its bid to advance beyond 50.64.
It met resistance at this level today and was forced down on the OPEC outlook. Further selling momentum takes the asset towards the 48.33 support, with 46.41 and 44.16 lining up as additional downside targets.
On the other hand, restoration of the advance requires a break of 50.64. This move would open the door towards the 52.67 upside target and help take Brent crude towards the pre-pandemic highs of early 2020.
