JP Morgan expects oil demand to rebound in 2Q20

JP Morgan expects oil demand to rebound in 2Q20

BAKU, Azerbaijan, March 2

By Leman Zeynalova - Trend:

In oil, the recent downgrade of China’s GDP translates to approximately 500,000 barrels per day loss in demand for the first quarter of 2020, compared with the previous quarter based on the historical elasticity, Trend reports citing US JP Morgan bank.

“This would equate to a contraction of 1 percent year-on-year in China’s 1Q20 oil demand or 100,000 barrels per day,” JP Morgan said in its report.

The bank’s GDP estimates suggest a near 6 percent rebound in oil demand in 2Q20 y/y and modest improvements in 2H20. “We have already priced in such a shock to China's oil demand in our existing balances, and continue to note downside risks to this forecast.”

A bottom-up scenario that estimates the shock to oil demand based on the duration of factory shutdowns and travel disruptions, such as flight and highway traffic data, suggests a 0.7 mbd decline in Chinese oil demand in 1Q20 y/y or a loss of 1.1 mbd compared with 4Q19—a significantly larger impact than that implied by our GDP and IP projections, according to JP Morgan.

The report shows that the same bottom-up approach suggests a more conservative 2Q20/or balance of the year recovery (2.6 percent y/y increase) compared with GDP-linked forecasts as the catch-up demand from spare industrial capacity in unlikely to fully offset declines from a more gradual recovery in jet fuel, diesel and gasoline demand.

“Additionally, the human impact of the health crisis is likely to curb domestic disposable spending for a longer duration.”

After recovering about a third of the January COVID-19 losses over the first three weeks of February, commodities markets were freshly roiled again this week as cases outside of China began to escalate, the bank says.

“Our short-term price momentum indicators suggest downside price risk of a further 5 percent from current spot levels for Brent and 17.5 percent for copper,” reads the report. “Looking into the spring, we expect that the virus seasonality and the postvirus bounce in global activity will drive a recovery in cyclical assets. As a result, we reiterate our neutral view on commodity markets for the time being.”

---

Follow the author on Twitter: @Lyaman_Zeyn

Subscribe to Trend in Google News! Subscribe
Magnitude 6.2 earthquake strikes Unalaska, Alaska
Magnitude 6.2 earthquake strikes Unalaska, Alaska
GM sets $6.5 bln for in Michigan electric vehicle plants -document
GM sets $6.5 bln for in Michigan electric vehicle plants -document
NYPD officer killed, another seriously wounded in shooting
NYPD officer killed, another seriously wounded in shooting
Loading Bars
Latest
German conservatives elect right-winger Merz as new party leader
Non-hydro renewables overtake hydro for first time in Turkey
Record-breaking indicators in non-oil sector - what is secret to success of Azerbaijan's economic strategy?
Iran shares data on exports from Aras Free Trade Zone
Kazakhstan names damage caused to business as result of large-scale rallies
Georgia publishes COVID-19 data for January 22
Iran’s Bahar Azadi gold coin price dips
India now allows 6 people to register on one number for Covid vaccination
Azerbaijan shares data on number of vaccinated citizens
Azerbaijan confirms 1,614 more COVID-19 cases, 610 recoveries
Azerbaijan changes rules for quarantine control of Covid-19
India's Karnataka approves design & launch of nano-satellite by govt school students at Rs 1.9 Cr
‘One Modi cannot change a country, need more icons like him’: Himanta Biswa Sarma
Seizing of illegally stored weapons from citizens continues in Kazakhstan - interior minister
Azerbaijani border serviceman commits suicide in military hospital
Iran unveils details of agricultural export
Kazakh Armed Forces performing tasks to ensure public order in regions with “red” level of terrorist threat
Tokyo hits record 10,000 COVID cases, Japan over 50,000 for first time
Number of COVID-19 infections in Russia surpasses 11 mln since pandemic began
Kazakhstan developing measures to reform Samruk-Kazyna Fund's activities
PMO records surge in load/unload operations at Iranian ports
S&P predicts gas production growth in Azerbaijan through 2025
Turkmen medical enterprise discloses production data
Azerbaijan to hold auction for Ferrum Kapital CJSC's bonds
Kazakh president talks need to continue work to reveal all circumstances of recent riots
Kazakh oil and gas company to purchase helium via tender
Iran reveals COVID-19 data for January 22
Oil price spikes likely in 2022 amid inventory tightness midyear
7 killed, 16 injured in massive fire in central Mumbai high-rise
Oil demand to be robust in coming years despite net-zero strategies
India reports 3,37,704 new Covid cases, 488 deaths in 24 hours
Number of COVID-19 infections in Russia surpasses 11 mln since pandemic began
OPEC+ focus to switch away from propping up prices
Iran shares data on buy/sell operations at its Mercantile Exchange
Most people feel I-T exemption limit could be raised from Rs 2.5 lakh: India's KPMG
Turkmenistan’s Balkandokma complex doubles cotton yarn sales
Uzbekistan reveals data on agricultural, forestry and fisheries production
Tax benefits to increase disposable income likely in India's Union Budget
Uzbekistan approves procedure for rational use of land resources
S&P discloses inflation forecast for Azerbaijan through 2025
S&P Global Ratings announces forecast for Azerbaijan's budget surplus
Magnitude 6.2 earthquake strikes Unalaska, Alaska
NIOC agrees with Russian companies to develop Iran's oil, gas fields
SOCAR dismisses information about purchasing bitumen plant in Armenia
Kazakh company eyes to import leather products from Uzbekistan
S&P comments on possible swap line between Central Banks of Azerbaijan and Turkey
Oil production in Azerbaijan to moderately rebound - S&P
Georgia discloses its main cement sources of import
Turkmenistan lays out plans for hydrogen energy development
US lawmakers seek litigation at WTO against India on wheat subsidy
Iran, Azerbaijan continue construction of Khudafarin and Giz Galasi hydro junctions (PHOTO)
Climate policy of Uzbekistan: Implementation of measures to prevent climate change and adaptation in most vulnerable sectors of economy
S&P Global Ratings approves Azerbaijan's credit rating at 'BB+/B'
UK Foreign Secretary to meet with Lavrov in Moscow in February
Netaji’s statue at India Gate to be 25 feet high: NMAG director
India to allow arms manufacturers to enhance production
Kazakhstan names Samruk-Kazyna's entreprises planned to be put up for IPOs
Iranian currency rates for January 22
Statistical center of Iran reveals figures of growing inflation
Azerbaijan reduces quarantine period for COVID-19 patients
Kazakh Gas Processing Plant opens tender on manufacturing of parts for pumping equipment
Azerbaijan's Kalbajar - most suitable for winter tourism among liberated areas, agency says
EAM Jaishankar dials envoys in US, Canada after 4 Indians freeze to death along US-Canada border
Balkan Shipbuilding Yard in Turkmenistan to build new ships
Uzbekistan shares domestic COVID-19 data for Jan.21
Azerbaijani oil prices decline
Azerbaijan talks probability of commercial oil & gas reserves at Aypara area in Caspian Sea
GM sets $6.5 bln for in Michigan electric vehicle plants -document
Georgia – Turkey trade turnover up
Subhas Chandra Bose's family members welcome PM's decision on Netaji's statue at India Gate
Kazakhstan talks business support measures related to tax legislation
Iran resumes gas export to Turkey
Central Bank of Azerbaijan fully meets demand at foreign exchange auction
US commits to helping Saudi Arabia, Gulf partners defend against threats from Yemen
NYPD officer killed, another seriously wounded in shooting
Poland, Georgia to hold Joint Intergovernmental Commission meeting – ministry
Saudi-led coalition denies targeting detention centre in Yemen's Saada
Arnold Schwarzenegger involved in car accident
Germany's minimum wage hike will not cost jobs - labour minister
Canadian tourist killed, 2 others wounded in Mexico resort shooting
Iran says gas flows to Turkey resume after being cut due to technical fault
Student shot at Maryland school, suspect in custody
France: Former aides to ex-president Nicolas Sarkozy jailed for opinion poll fraud
WHO recommends reduced dose Pfizer COVID vaccine for under 12s
Islamic State jailbreak in Syria, army barracks attack in Iraq leave at least 39 dead
U.N. chief condemns deadly Saudi-led coalition strike in Yemen
Amirabdollahian: new chapter in Iran-Russia ties to unfold
Trade turnover between Uzbekistan and Azerbaijan increases
Dozens killed in Saudi-led coalition air raid on Yemen prison
Price of fuel and lubricants in Kyrgyzstan increased by 70% over past year
Airbus cancels Qatar Airways order in escalating dispute
Turkey wraps up in-person semester with success against pandemic
Azerbaijan may toughen punishment for domestic violence
Azerbaijani Xalq Bank's profits increase
Azerbaijan names most profitable non-oil fields in terms of tax revenue growth
Kazakh oil and gas company to purchase variable speed drives
Кazakh Electricity Grid Operating Company opens tender to buy hydraulic press
Turkmenistan-Belarus trade turnover fell in 11M2021
Crime rate in Azerbaijani Armed Forces decreases - military prosecutor general
Size of consumer market in Azerbaijan increases - minister
All news