OPEC Points to 2020 Oil Surplus even as Demand Gradually Recovers

FILE PHOTO: A general view of the OPEC building and logo in Vienna , November 7, 2013. REUTERS/Leonhard Foeger/File Photo
FILE PHOTO: A general view of the OPEC building and logo in Vienna , November 7, 2013. REUTERS/Leonhard Foeger/File Photo
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OPEC Points to 2020 Oil Surplus even as Demand Gradually Recovers

FILE PHOTO: A general view of the OPEC building and logo in Vienna , November 7, 2013. REUTERS/Leonhard Foeger/File Photo
FILE PHOTO: A general view of the OPEC building and logo in Vienna , November 7, 2013. REUTERS/Leonhard Foeger/File Photo

The world faces an oil surplus in 2020 even as demand gradually recovers and record supply cuts by producers help rebalance the market, according to OPEC forecasts on Wednesday.

The latest monthly report from the Organization of the Petroleum Exporting Countries potentially increases pressure on the group and its allies, known as OPEC+, to curb more supply.

OPEC said demand would decline by 6.4 million barrels per day (bpd) in the second half of 2020, less than the drop of 11.9 million bpd in the first six months of the year, with a "gradual recovery" seen until the end of the year.

Oil prices have collapsed as lockdowns to limit the spread of the coronavirus have curtailed travel and economic activity. While some places in Europe and Asia have eased restrictions, concern over new outbreaks has kept a lid on prices.

To tackle the drop in demand, OPEC+ - which includes Russia - 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 oil market was strongly supported by a reduction of the global crude oil surplus, thanks mainly to the historic voluntary production adjustment agreement," Reuters quoted it as saying.

Despite the cuts made already, OPEC still pointed to a surplus in the market this year, in part because it now expects supply from outside the group to be about 300,000 bpd higher than previously thought.

A technical committee of OPEC+ and a ministerial panel met Wednesday and are expected to hold talks Thursday to review the supply cut's impact and seek better compliance from those yet to deliver their share in full, such as Iraq and Nigeria.

Brent crude was trading above $40 a barrel after the report's release and is up from a 21-year low below $16 reached in April.

In the report, OPEC did not further reduce its forecast for world oil demand in 2020, after steep cuts in earlier months. Still, downside risks remain for consumption in top consumer the United States, according to the group.

The supply pact agreed in April involves OPEC+ cutting output by 9.7 million bpd in May and June. OPEC+ agreed on June 6 to extend the cut for another month, a decision OPEC said the market had taken well.

In its report, OPEC said it had cut supply in May by 6.3 million bpd to 24.2 million bpd. That amounts to 84% compliance with the pledges, according to a Reuters calculation – higher than some estimates.

Overall OPEC+ compliance stood at 87% in May, a source said on Wednesday.

OPEC estimated the demand for its crude this year at 23.6 million bpd, down 700,000 bpd from last month, suggesting it needs to cut about 600,000 bpd from May's rate to avoid a surplus.



Saudi Arabia Brings Together WIPO’s Intellectual Property Community Outside Geneva for 1st Time

CEO of the Saudi Authority for Intellectual Property Dr. Abdulaziz Al-Suwailem addresses the audience. (Asharq Al-Awsat)
CEO of the Saudi Authority for Intellectual Property Dr. Abdulaziz Al-Suwailem addresses the audience. (Asharq Al-Awsat)
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Saudi Arabia Brings Together WIPO’s Intellectual Property Community Outside Geneva for 1st Time

CEO of the Saudi Authority for Intellectual Property Dr. Abdulaziz Al-Suwailem addresses the audience. (Asharq Al-Awsat)
CEO of the Saudi Authority for Intellectual Property Dr. Abdulaziz Al-Suwailem addresses the audience. (Asharq Al-Awsat)

Saudi Arabia is gathering the global intellectual property community in Riyadh to shape the future of design rights at the Diplomatic Conference for the Design Law Treaty. This event marks the first time in over a decade that the World Intellectual Property Organization (WIPO) has held a diplomatic conference outside Geneva, and it is also the first such event hosted in Saudi Arabia and the Middle East.

The conference represents the final phase of negotiations to establish a treaty aimed at simplifying design protection processes by standardizing international registration requirements.

Dr. Abdulaziz Al-Swailem, CEO of the Saudi Authority for Intellectual Property (SAIP), emphasized that the Kingdom is working towards an international treaty setting core standards for registering industrial designs. This aligns with Saudi Arabia’s strategic goals under the National Intellectual Property Strategy, launched by Crown Prince Mohammed bin Salman, which aims to position Riyadh as a global hub for intellectual property.

Since SAIP’s establishment, investments in design in Saudi Arabia have increased by 161%, reflecting growth driven by ambitious projects like NEOM and Qiddiya, which demand advanced design protections.

Al-Swailem described the conference as “diplomatic and negotiation-focused,” with member states striving to create a unified registration process, which would allow designers to protect their work across all member countries, making global design protection more accessible.

In his opening remarks, Al-Swailem highlighted that this conference is a pivotal moment—the first time in 25 years the international intellectual property community has convened to collectively support global design innovation.

He noted that Saudi Arabia is contributing actively to international IP organizations and is committed to enhancing global cooperation to support creators and innovators.

Through SAIP, the Kingdom has launched its first National Intellectual Property Strategy, a comprehensive framework to foster innovation and creativity across the nation, according to Al-Swailem. Last year, the Crown Prince announced a $340 million investment to support this strategy, reinforcing the Saudi commitment to intellectual property advancement. These efforts have led to Saudi Arabia’s rise of 18 positions in WIPO’s Global Innovation Index since 2021, placing it 46th globally and among the world’s top 50 innovation leaders.

WIPO Director General Daren Tang praised the event as a “historic moment,” applauding Saudi Arabia’s rise in the Global Innovation Index due to its concentrated efforts on intellectual property.

The proposed Design Law Treaty aims to establish a standardized legal framework for the registration and protection of design rights, covering essential elements like application details, imaging requirements, and filing and publication dates.

WIPO, comprising 193 member states, has administered international treaties on intellectual property since 1982, when Saudi Arabia joined. The organization currently oversees 26 treaties, including those on industrial property and copyright.