OPEC slashed its forecast on Wednesday for global oil demand this year and predicted this quarter would see the steepest decline even as some countries ease lockdown measures designed to stem the coronavirus outbreak.
The Organization of the Petroleum Exporting Countries now expects global demand to contract by 9.07 million barrels per day (bpd), or 9.1 percent, in 2020, it said in a monthly report. Last month, OPEC expected a contraction of 6.85 million bpd.
OPEC and its allies have agreed to a record supply cut that started on May 1, while the United States and other nations said they would pump less.
OPEC said these curbs were already helping.
"The speedy supply adjustments in addressing the current acute imbalance in the global oil market have already started showing positive response, with rebalancing expected to pick up faster in the coming quarters," OPEC said in the report, according to Reuters.
Austrian energy group OMV sees hope for a recovery in oil prices in the second half of 2020 helped by increased fuel demand and output cuts, its chief executive said.
The willingness of producers such as Saudi Arabia and Norway to drastically cut output shows oil prices have a chance to return to a reasonable level, OMV CEO Rainer Seele said.
“We therefore expect the oil price to gradually recover in the second half and to average $40 for the year,” Seele said in an interview with Reuters.
Gasoline and diesel consumption in Austria halved in April, but was back at 60 percent after all shops were allowed to reopen in early May and has hit 65 percent in the past few days, he said.