BAKU, Azerbaijan, June 16
By Leman Zeynalova - Trend:
Oil demand in 2020 is expected to fall by 8.1 million barrels per day (mb/d), the largest in history, before recovering by 5.7 mb/d in 2021, Trend reports citing the International Energy Agency (IEA).
“Reduced jet and kerosene deliveries will impact total oil demand until at least 2022. In this Report the forecast for 2020 oil demand has been raised by nearly 500 kb/d to 91.7 mb/d, due to stronger than expected deliveries during the Covid-19 lockdown. In China, oil demand recovered fast in March-April and India’s demand rose sharply in May,” reads the Oil Market Report of the IEA.
While the oil market remains fragile, the recent modest recovery in prices suggests that the first half of 2020 is ending on a more optimistic note, according to the agency.
“New data show that demand destruction in the early part of the year was slightly less than expected, although still unprecedented. On the supply side, record output cuts from OPEC+ and steep declines from other non-OPEC producers saw global oil production fall by a massive 12 mb/d in May. In addition to a 9.4 mb/d decline in OPEC+ supply last month, output from non-OPEC countries outside the deal has fallen by 4.5 mb/d since the start of the year. To further speed up the market rebalancing, OPEC+ decided on 6 June to extend their historic output cut of close to 10 mb/d through July,” the report says.
IEA said that for demand, increased mobility indicators in the March-May period provided support: in particular, China’s strong exit from lockdown measures has seen demand in April almost back to year-ago levels.
“We have also seen a strong rebound in India in May, although demand is still well below year-ago levels. In the second half of the year the easing of lockdown measures in many countries should provide a boost. Even so, demand in 2020 is expected to be 8.1 mb/d lower than in 2019, with the biggest declines seen in the first half of the year. Our first forecast for 2021 as a whole shows demand growing by 5.7 mb/d, which, at 97.4 mb/d, will be 2.4 mb/d below the 2019 level,” reads the report.
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