Demand will rise by 6.54mn bpd next year to 96.84mn bpd, the Organisation of the Petroleum Exporting Countries said in a monthly report. The growth forecast is 80,000 bpd less than expected a month ago.
A further weakening of demand could threaten plans by Opec and allies to taper in 2021 the record oil output cuts they made this year.
Opec is keeping an eye on the situation but currently has no plan to cancel the supply boost.
Oil prices have collapsed as the coronavirus crisis curtailed travel and economic activity.
While in the third quarter an easing of lockdowns allowed demand to recover, Opec sees the pace of economic improvement slowing again.
“While the 3Q20 recovery in some economies was impressive, the near-term trend remains fragile, amid a variety of ongoing uncertainties, especially the near-term trajectory of Covid-19,” Opec’s report said of the economic outlook.
“As this uncertainty looms large, amid a globally strong rise in infections, it is not expected that the considerable recovery in 3Q20 will continue into 4Q20 and in 2021.”
Opec has steadily lowered its 2021 oil demand growth forecast from an initial 7mn bpd expected in July.
The group also cut its estimate of world oil demand in the current quarter by 220,000 bpd. It left its estimate of the scale of this year’s historic contraction in oil use steady at 9.47mn bpd.
To tackle the drop in demand, Opec and its allies including Russia, a group known as Opec+, agreed to a record supply cut of 9.7mn bpd starting on May 1.
The cut was tapered to 7.7mn bpd in August and Opec+ plans further tapering next year by boosting supply by 2mn bpd from January.
In the report, Opec said its output fell by 50,000 bpd to 24.11mn bpd in September.
That amounted to 104% compliance with the supply cut pledges, according to a Reuters calculation – up from August’s figure of 103%. Opec also forecast demand for its crude will be 200,000 bpd lower than expected next year at 27.93mn bpd. Assuming global demand rebounds as expected, this in theory leaves room for Opec members to increase output in 2021 by over 3.8mn bpd from September’s rate without causing a glut.