<article><p class="lead">Opec has revised upwards its forecast for non-Opec oil supply this year, leading to a fall in the projected call on its own members' crude. The organisation has lowered its forecast for global oil demand this year.</p><p>Opec's latest<i> Monthly Oil Market Report</i> (MOMR) expects oil demand to decrease by 9.1mn b/d to 90.6mn b/d this year, down by 100,000 b/d from <a href="https://direct.argusmedia.com/newsandanalysis/article/2122916">last month's projection</a>. </p><p>The downward revision reflects weaker-than-expected demand in the second quarter from some non-OECD countries and a decline in global GDP in 2020 to 4pc, from 3.7pc last month, leading to lower oil demand expectations for the second half of the year.</p><p>Opec's forecast for oil demand growth in 2021 is unchanged at 7mn b/d on the year, with consumption projected to reach 97.6mn b/d. The organisation assumes that the Covid-19 pandemic will be largely contained and that economic activity will increase by 4.7pc on the year.</p><p>Opec has reduced the projected call on its own members' crude to 23.4mn b/d in 2020, down by 400,000 b/d from the previous month and a fall of 5.9mn b/d from 2019. The call on Opec crude in 2021 has also been revised down by 500,000 b/d from the previous month to stand at 29.3mn b/d.</p><p>The reduction in the projected call on Opec crude in 2020 follows a rise in the forecast for non-Opec supply to 62.11mn b/d in 2020, down by 3.03mn b/d on the year. Its previous projection was for a 3.26mn b/d decline. </p><p>But Opec expects non-Opec crude supply to rise in the third quarter, starting from this month. It sees production growth this year from Norway, Brazil, Guyana and Australia and declines mainly from the US, Russia, Canada, Kazakhstan, Malaysia, Colombia and Azerbaijan.</p><p>It expects a smaller decline in US production at 1.32mn b/d in 2020 on the year, up by 46,000 b/d from its previous projection as it anticipated higher production in the second half of the year.</p><p>Opec has increased its non-Opec supply forecast for 2021 by 66,000 b/d to 63.10mn b/d, up by 980,000 b/d on the year, mainly as a result of better-than-expected recovery in Canada's production.</p><p>"Nevertheless, uncertainty surrounding financial and logistical constraints for US production, as well as a potential second wave of Covid-19 infections globally, remains a concern," the report said. </p><p>Opec crude production reached 23.17mn b/d in July, according to an average of secondary source estimates, including <i>Argus</i>, up by 980,000 b/d from June. This left Opec participants 97pc compliant with the Opec+ agreement, similar to <i>Argus </i><a href="https://direct.argusmedia.com/newsandanalysis/article/2130772">estimates</a>. The Opec+ Joint Ministerial Monitoring Committee (JMMC), which focuses on member compliance, is scheduled to meet on 18 August.</p><p>Citing preliminary data, Opec said OECD commercial stocks rose in June for the fourth consecutive month to 3.24bn bl. This was up by 24.3mn bl compared with the previous month and 291.2mn bl above the latest five-year average.</p><p class="bylines">By Rowena Edwards</p></article>
