Oil demand set to recover from June, says Rystad Energy
BAKU, Azerbaijan, May 8
By Leman Zeynalova – Trend:
Oil demand is expected to decrease by 10.9 percent for 2020, or 10.8 million barrels per day (bpd) year-over-year, Trend reports citing Rystad Energy.
“Our estimates show that total oil demand in 2019 was approximately 99.5 million bpd, which is now projected to decline to 88.7 million bpd in 2020. To put the number into context, last week we projected a decrease to 88.8 million bpd,” the company said.
April’s demand for oil was estimated at 71.8 million bpd, a 27.1 percent drop. Similarly, May’s demand is expected to fall by 21.3 percent to 77.7 million bpd. June’s demand is forecast at 83.5 million bpd, down by 15 percent.
Further ahead, total oil demand in 2021 is expected to average at 98.8 million bpd.
This downgrade takes into account developments that have occurred up to and including Tuesday, 5 May.
“We believe that total global demand for road fuels will fall by 11.2 percent, or by 5.3 million bpd year-over-year, unchanged from last week’s report. Road fuel demand in 2019 is estimated to have been 47.4 million bpd. We now see it reaching only about 42.1 million bpd in 2020,” reads the report.
Most of this reduction took place in April, which saw road fuel demand limited to just 31.7 million bpd globally, a 33 percent drop. May’s road fuel demand is now estimated at 36.8 million bpd, down by 22.3 percent. June’s road fuel demand is now forecast to reach 40 million bpd, down by 15.6 percent.
In 2021, road fuel demand is expected to average at 47.1 million bpd.
Among the various fuel sectors, we expect jet fuel to be hit the hardest. We expect global commercial air traffic will fall by at least 31 percent this year versus the levels seen in 2019, which we estimate stood at around 99,700 flights per day. This number will be revised as operators continue to cut routes.
Many distressed airlines are now facing heavy cost cuts and are laying off unprecedented numbers of employees as many non-essential routes are closed.
As a base case we now assume that the common summer air travel peak will not occur at all this year. We see global jet fuel demand falling by almost 33.6 percent year-over-year, or by at least 2.4 million bpd. Last year’s demand for jet fuel was about 7.2 million bpd.
Jet fuel demand in April was as low as 2.1 million bpd, and will shrink further to 1.9 million bpd in May before rebounding to 3 million bpd in June.
In 2021, jet fuel demand is expected to average at 6.9 million bpd.
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