The International Energy Agency (IEA) has raised its forecast for 2020 oil demand by 500,000 barrels per day to 91.7 million barrels per day (MMbpd), the organization’s latest oil market report has revealed.
According to the IEA, the increase was made 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, the organization stated. The easing of lockdown measures in many countries in the second half of the year should also provide a boost, the IEA outlined.
“If recent trends in production are maintained and demand does recover, the market will be on a more stable footing by the end of the second half [of the year],” the IEA stated in its June report.
“However, we should not underestimate the enormous uncertainties,” the IEA added in its report.
The IEA expects oil demand to fall by 8.1MMbpd this year, which it highlighted is the largest amount in history, before recovering by 5.7MMbpd to 97.4MMbpd in 2021. Reduced jet and kerosene deliveries will impact total oil demand until at least 2022, the IEA noted.
“Data from the International Air Transport Association show that passenger traffic in 2020 will be nearly 55 percent lower than in 2019,” the IEA stated in its latest report.
“The industry will continue to be a drag on oil demand through 2021, with our first estimate showing that, having fallen by 3MMbpd in 2020, jet/kerosene demand will rebound by only 1MMbpd in 2021, leaving it below the pre-crisis level,” the IEA added in the report.
Last week, Rystad Energy forecasted that oil demand would drop by 11.8 percent, or 11.7MMbpd, to 87.8MMbpd in 2020 before rebounding by 7.7MMbpd to hit a total of 96.5MMbpd next year.
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