Energy markets and related exchange traded funds may be stuck in a rut for longer than expected as the Organization of Petroleum Exporting Countries lowers its forecasts in a post-coronavirus world.

Year-to-date, the Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy ETF, declined 34.1%. Meanwhile, the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, plunged 70.9% and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, declined 29.5%.

In a monthly report, OPEC anticipated that the Covid-19 pandemic will reduce global oil demand more than previously expected this year, extending estimates to a 9.1 million barrels per day, or more than 9% lower from last year’s demand figure, the Wall Street Journal reports.

Furthermore, the oil cartel reduced forecasts for the expected negative effect of the pandemic on the global economy and now projects a 4% contraction in activity from a previous 3.7% forecast.

While the global economy will start to recover in the second half of 2020, “the latest surge of infections in the U.S. will need to be closely monitored, as a continuation of this trend may lead to an erosion in rebounding consumer confidence and spending behavior,” OPEC said.

The organization also highlighted the rising coronavirus cases in India, Brazil, and some eurozone economies, like Spain, which will also need to be watched closely.

Oil observers have been hard-pressed to come up with a reliable outlook. The declining U.S. inventories and uneven recovery in economic activity have come out as the country continues to grapple with rising coronavirus infection rates and fresh regional lockdowns.

As a result, oil prices have stalled within a low price range since mid-June. WTI futures were hovering around $42.7 per barrel while Brent crude futures were at $45.5 per barrel.

Overall, OPEC warned that 2020 oil demand will be worse than previously feared, but it left forecasts for a record-breaking rebound in 2021 unchanged.

Meanwhile, on the supply side, the organization also projected supply to tighten by less than anticipated. OPEC members even softened their historic production cuts.

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