OPEC slashes oil demand forecast, cuts to restore balance

Oil has recovered to $30 a barrel from the low last month and held onto an earlier gain after the report’s release. (Reuters)
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Updated 14 May 2020

OPEC slashes oil demand forecast, cuts to restore balance

  • OPEC now expects global demand to contract by 9.07 million barrels per day (bpd), or 9.1 percent, in 2020

LONDON: OPEC on Wednesday again slashed its forecast for global oil demand this year as the coronavirus outbreak causes a global recession, although it said record supply cuts by the group and other producers were already helping to rebalance the market.

OPEC 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.

Oil prices have collapsed in 2020 with benchmark Brent hitting a 21-year low of $15.98 a barrel on April 22. To tackle the drop, OPEC and its allies agreed to a record supply cut, while the US and other nations said they would pump less. OPEC said these measures 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.

Oil has recovered to $30 a barrel from the low last month and held onto an earlier gain after the report’s release.

OPEC expects this quarter to see the biggest drop in demand and lowered its demand forecast for the second quarter by 5.4 million bpd. Downside risks remain for consumption in the US, Europe and South Korea, OPEC said.

OPEC lowered its estimate of global economic growth in 2020, forecasting a contraction of 3.4 percent and saying the coronavirus crisis “has caused a recession in the global economy as well as an unprecedented oil demand shock.”


Indonesia’s anti-trust watchdog levies $3 million in fines on Grab and partner

Updated 03 July 2020

Indonesia’s anti-trust watchdog levies $3 million in fines on Grab and partner

  • Grab infringed the anti-monopoly laws after evaluating the case
  • Grab is Southeast Asia’s most valuable startup with a valuation of $14 billion

JAKARTA: Indonesia’s anti-trust watchdog announced fines totaling more than $3 million for Grab and its business partner after finding it guilty of breaking anti-monopoly laws, a verdict the ride-hailing firm vowed to appeal.
The Business Competition Supervisory Commission (KPPU) said it had found Grab had discriminated against its drivers, prioritizing those provided by partner PT Teknologi Pengangkutan Indonesia (TPI) to the Softbank-backed firm.
In a statement, Dinni Melanie, the chair of the watchdog judicial panel, said it had found Grab infringed the anti-monopoly laws after evaluating the case on Thursday evening.
The agency imposed a fine of $2.1 million on Grab and a penalty of $1.03 million rupiah on TPI.
A spokesman for Grab, which is Southeast Asia’s most valuable startup with a valuation of $14 billion, said the firm would appeal the verdict.
“Grab’s view is that it has not violated any regulation, engaged in any anti-competitive business practices, or injured any third parties,” he said, characterizing the watchdog’s findings as “unsubstantiated allegations.”
Reuters could not immediately reach TPI to seek comment.