Oil demand forecasts lowered by EIA on coronavirus

Oil&Gas Materials 12 February 2020 14:14 (UTC +04:00)
Oil demand forecasts lowered by EIA on coronavirus

BAKU, Azerbaijan, Feb.12

By Leman Zeynalova – Trend:

Global petroleum and liquid fuels demand is expected to average 100.3 million barrels per day (b/d) in the first quarter of 2020, the US Energy Information Administration (EIA) said in its February Short-term Energy Outlook (STEO), Trend reports.

“This demand level is 0.9 million b/d less than forecast in the January STEO and reflects both the effects of the coronavirus and warmer-than-normal January temperatures across much of the northern hemisphere,” reads the report.

The outbreak in the Chinese city of Wuhan - which is an international transport hub - began at a fish market in late December 2019. Since then over 1,000 people have died and over 45,000 people have been confirmed as infected.

Some sources claim the coronavirus (or COVID-19) outbreak started as early as November 2019.

Aside from Mainland China, the cases of coronavirus spreading have also been confirmed in Japan, Singapore, Thailand, South Korea, Hong Kong, Australia, Germany, the US, Malaysia, Taiwan, Vietnam, Macau, France, Canada, the UAE, India, Italy, Russia, Philippines, the UK, Nepal, Cambodia, Belgium, Spain, Finland, Sweden and Sri Lanka.

EIA now expects global petroleum and liquid fuels demand will rise by 1.0 million b/d in 2020, which is lower than the forecast increase in the January STEO of 1.3 million b/d in 2020, and by 1.5 million b/d in 2021.

The magnitude and duration of the coronavirus’s effects remain highly uncertain, but EIA is reducing its estimates for Chinese and global oil consumption for 2020 as a result of the events.

“Travel restrictions in China that began in mid-January are disrupting petroleum demand in not only China but also in other countries. EIA expects liquid fuels consumption in China to average 14.8 million barrels per day (b/d) from February through April, when EIA assumes the effects of travel restrictions will be most acute. That level of consumption is 0.4 million b/d less than forecast in last month’s STEO. Jet fuel demand is likely to fall because of travel restrictions and demand for other oil products is likely to fall because of lower economic growth.”

EIA has also lowered its expected liquid fuels consumption for the rest of Asia (excluding China) by 0.1 million b/d for the February through April period compared with last month’s STEO.

In addition to demand disruptions, oil markets faced renewed supply disruptions from Libya, where unrest in the country led to force majeure events at its main export terminals.

EIA estimates that the export terminal disruptions caused Libya’s crude oil production to average 0.8 million b/d in January, down from 1.2 million b/d in December. “The outages became more severe later in the month, and by the first week of February, EIA estimates Libya was producing less than 0.2 million b/d.”


Follow the author on Twitter: @Lyaman_Zeyn