A week after extending production cuts, the Organization of the Petroleum Exporting Countries (OPEC) on Thursday raised its forecast for world oil demand in 2021, reflecting the cartel’s expectations for a stronger economic recovery in the second half of the year.

Oil demand growth

OPEC, in its Monthly Oil Market Report (MOMR) released Thursday, said it now expects global oil demand will grow by 5.9 million b/d this year to 96.3 million b/d. That marks an increase from its previous growth estimate of 5.8 million b/d.

Demand in 2020 contracted by 9.6 million b/d to 90.4 million b/d, according to OPEC estimates, the result of travel restrictions and business lockdowns in response to the coronavirus pandemic.

Researchers said in the MOMR that demand remains light early this year “due to...