The Organization of the Petroleum Exporting Countries (OPEC) revised down its forecast of global oil demand for 2021, predicting a year-on-year expansion of 5.8 million barrels per day (b/d) in its monthly report published on Thursday.

This is about 0.1 million b/d lower than last month's forecast, mainly due to extended or re-introduced lockdowns in a number of Organization for Economic Cooperation and Development (OECD) countries, according to the report.

Crude oil spot prices rose firmly in January, with the OPEC daily basket price increasing 5.21 U.S. dollars, or 10.6 precent, month-on-month, to average 54.38 dollars a barrel, it said.

While the pandemic continues to dominate world economic developments, prospects for improvements in the containment of COVID-19 are rising, said OPEC.

It predicted that economic activity would "significantly gain pace" by the end of June 2021, as the impact of the pandemic would taper off, and the momentum is expected to be supported by pent-up demand, especially in the contact-intensive services sectors like tourism, leisure and hospitality.

Nonetheless, numerous challenges still remain, including COVID-19 variants and the effectiveness of vaccines against these mutations, it added.

Moreover, sovereign debt in most economies has risen to levels at which an increase in interest rates could cause severe fiscal strain, according to the report.

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