BAKU, Azerbaijan, July 10
By Leman Zeynalova – Trend:
The level of global oil demand is expected to improve in the second half of 2020, Trend reports with reference to the Oil Market Report of the International Energy Agency (IEA).
“The worst of the demand destruction was in the first half of the year when demand fell by 10.75 million barrels per day (mb/d). For the second half we expect an improvement in the level of decline to 5.1 mb/d. We estimate that global oil demand this year will average 92.1 mb/d, down by 7.9 mb/d versus 2019, a slightly smaller decline than forecast in the last report. This is mainly because the decline in 2Q20 was less severe than expected,” reads the report.
For 2021, the IEA has made some minor adjustments to its outlook and demand will be 97.4 mb/d; but due to the improved outlook for 2020 the recovery next year is lower at 5.3 mb/d.
“Average demand in 2021 will be 2.6 mb/d below the 2019 level with jet/kerosene accounting for three-quarters of the deficit,” said the report.
IEA estimates that global oil demand fell by 16.4 mb/d year-on-year in 2Q20 as lockdowns were imposed to combat the Covid-19 pandemic.
“Demand rebounded strongly in China and India in May, increasing by 0.7 mb/d and 1.1 mb/d m-o-m, respectively. World oil demand is projected to decline by 7.9 mb/d in 2020 and to recover by 5.3 mb/d in 2021. The recent increase in Covid-19 cases and the introduction of partial lockdowns introduces more uncertainty to the forecast,” reads the report.
While the oil market has undoubtedly made progress since “Black April”, the large, and in some countries, accelerating number of Covid-19 cases is a disturbing reminder that the pandemic is not under control and the risk to our market outlook is almost certainly to the downside, according to the IEA.
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