The global oil demand forecast for 2020 and 2021 has been revised down by the International Energy Agency (IEA) due to rising Covid-19 cases and weakness in the aviation sector.
In its August market report, the IEA says oil demand forecast for this year is expected to fall by 140,000 barrels per day (bpd) to 91.9 million bpd - eight million bpd down year-on-year. In 2020 demand will be 39% below the 2019 level.
The oil watchdog has also revised down its 2021 global demand estimate by 240,000 bpd to 97.1 million bpd, mainly due to “aviation sector weakness”.
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In a statement the IEA said: “For road transport fuels, demand in the first half of 2020 was slightly stronger than anticipated, but for the second half we remain cautious and the upsurge in Covid-19 cases has seen us downgrade our estimates, mainly for gasoline.
“For diesel, there is evidence that the recovery in business and industrial activity combined with ongoing growth in e-commerce are supporting trucking activity as more goods are delivered to customers. Jet fuel demand remains the major source of weakness.
“Revised data show that in April the number of aviation kilometres travelled was nearly 80% down on last year and in July the deficit was still 67%. With few signs that the picture will improve significantly soon, we have downgraded our estimate for global jet fuel and kerosene demand.”
The Guardian reports that the impact of the coronavirus has “triggered major downgrades” for oil price forecasts among the world’s biggest oil companies.
BP revised down its own oil forecasts by almost a third to an average of $55 a barrel between 2020 and 2050. Shell cut its oil price forecasts from $60 a barrel to an average of $35 a barrel this year, rising to $40 next year, $50 in 2022 and $60 from 2023.
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