<p>OPEC fears its record oil cuts will fail to rebalance the market and solve the worst glut in history if a second wave of the Covid-19 pandemic undermines an economic recovery later this year, according to internal OPEC research seen by Reuters.</p>.<p>OPEC, Russia and their allies, a group known as OPEC+, said they would ease record oil curbs from Aug. 1 citing a gradual recovery in demand as global lockdowns loosen up.</p>.<p>The group expects oil demand to climb by 7 million barrels per day (bpd) in 2021 after falling 9 million bpd this year. OPEC wants to lift its output by 6 million bpd in 2021. {OPEC/M]</p>.<p>But internal research by OPEC, seen by Reuters, suggests those targets could be at risk if a second wave of the virus forces new lockdowns around the world.</p>.<p>Such a scenario would push demand down by 11 million bpd in 2020 and, most importantly for OPEC, lead to bigger inventories, a key measure OPEC uses to monitor the efficacy of output cuts.</p>.<p>"It should be noted in this scenario that the overall stock build reaches an unprecedented high of 1.218 billion barrels in 2020," OPEC said in research prepared for Wednesday's OPEC+ panel meeting where ministers recommended easing output cuts.</p>.<p>Such a figure would mean putting into storage the equivalent of more than 12 days of global oil output due to poor demand.</p>.<p>Under the "second wave" scenario, global stocks would fail to drawdown in the third quarter and would only modestly decline in the fourth quarter, staying about 149 million barrels above a five-year average in industrialised OECD nations.</p>.<p>OPEC has said it wants to keep inventories at or below the five-year average. Its current base case scenario foresees OECD stocks staying 104 million barrels below a five-year average in the OECD by the end of 2020 after a drawdown later in the year.</p>
<p>OPEC fears its record oil cuts will fail to rebalance the market and solve the worst glut in history if a second wave of the Covid-19 pandemic undermines an economic recovery later this year, according to internal OPEC research seen by Reuters.</p>.<p>OPEC, Russia and their allies, a group known as OPEC+, said they would ease record oil curbs from Aug. 1 citing a gradual recovery in demand as global lockdowns loosen up.</p>.<p>The group expects oil demand to climb by 7 million barrels per day (bpd) in 2021 after falling 9 million bpd this year. OPEC wants to lift its output by 6 million bpd in 2021. {OPEC/M]</p>.<p>But internal research by OPEC, seen by Reuters, suggests those targets could be at risk if a second wave of the virus forces new lockdowns around the world.</p>.<p>Such a scenario would push demand down by 11 million bpd in 2020 and, most importantly for OPEC, lead to bigger inventories, a key measure OPEC uses to monitor the efficacy of output cuts.</p>.<p>"It should be noted in this scenario that the overall stock build reaches an unprecedented high of 1.218 billion barrels in 2020," OPEC said in research prepared for Wednesday's OPEC+ panel meeting where ministers recommended easing output cuts.</p>.<p>Such a figure would mean putting into storage the equivalent of more than 12 days of global oil output due to poor demand.</p>.<p>Under the "second wave" scenario, global stocks would fail to drawdown in the third quarter and would only modestly decline in the fourth quarter, staying about 149 million barrels above a five-year average in industrialised OECD nations.</p>.<p>OPEC has said it wants to keep inventories at or below the five-year average. Its current base case scenario foresees OECD stocks staying 104 million barrels below a five-year average in the OECD by the end of 2020 after a drawdown later in the year.</p>