The COVID-19 pandemic will lead to a demand contraction of 17.3 million barrels per day (b/d) year on year in the second quarter (Q2) of 2020, according to a monthly report published by the Organization of the Petroleum Exporting Countries (OPEC) on Wednesday.

World oil demand is projected to decrease by 9.1 million b/d in 2020, unchanged from the previous month's assessment, according to the report.

It noted that spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals improved significantly.

"The contango structure of oil futures prices flattened considerably over the month in all three markets, suggesting that the supply-demand fundamentals are gradually improving," said OPEC.

It emphasized that the market has reacted positively to the decisions taken at the 179th OPEC conference and the 11th OPEC and non-OPEC ministerial meeting, held on June 6, to extend the first phase of the production cut by one further month.

Global economic growth is forecast to decline by 3.4 percent in 2020, it said.

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