World Crude Oil Supply and Demand Forecast, 2020-2021

(13 April 2020) OPEC+ countries agreed to cut their overall oil production by 9.7 million barrels per day at the 10th extraordinary meeting held on April 12. This is the largest oil production cut ever negotiated aimed at stabilizing oil prices. The agreed 9.7 mb/d production cut is planned for the two months starting on 1 May 2020. In the following 6 months, OPEC+ countries will cut production by 7.7 mb/d more and in the subsequent 16 months, the adjustment will constitute 5.8 mb/d.

• Oil prices started to rise as early as ahead of emergency OPEC+ meeting held on April 9 - the first meeting after Russia and Saudi Arabia failed in early March to reach an agreement on oil production cuts, sending oil prices to historic lows.
• The oil market is currently dramatically oversupplied due to the price war between Russia and Saudi Arabia and contracting demand caused by the Coronavirus pandemic.
• According to the latest estimate by the US Energy Information Administration (EIA), oil supply exceeded demand by around 6 million barrels per day in the first quarter of 2020 and the gap is expected to extend to 11.4 million barrels per day in the second quarter.