The COVID-19 pandemic has forced several countries to go under lockdown, thus reducing the demand for oil, resulting in supply cut and affecting the economy in the adverse.
The Organization of the Petroleum Exporting Countries (OPEC) has released its monthly report on May 13. In the report, the OPEC has revised down its forecast of global oil demand for 2020, predicting a 9.07 million barrels per day year-on-year contraction.
According to the report, the Organization for Economic Co-operation and Development (OECD) oil demand has been revised lower by 1.20 million b/d, while non-OECD oil demand growth has been adjusted down by 1.03 million b/d, for total oil demand to reach 90.59 million b/d.
The report has also predicted the worst contraction in major oil demand centres around the world to take place in the second quarter of 2020. The contraction will be mostly in OECD Americas and Europe, with transportation and industrial fuels affected the most.
The OPEC also predicted that the world economy will decline by 3.4 percent in 2020, following global economic growth of 2.9 percent in 2019.