Global oil demand is being destroyed as the coronavirus forces people around the world to remain indoors and avoid all unnecessary travel. Currently, more than two-thirds of the world’s population are in lockdown, meaning no one is driving, flying or doing much that would require the use of crude or its derivatives. The ramifications for the oil market are huge, with refiners, producers and even petrostates all facing uncertain futures. The most immediate set of data from America starkly illustrated the impact. On Wednesday, the U.S. Energy Information Administration reported U.S. drivers consumed the least gasoline for at least 30 years, as normal life ground to a halt.Demand for crude could fall by 27 million barrels a day this month, according to Rystad Energy AS, while Trafigura Group estimates the current hit to consumption is around 35 million barrels a day.
Against this backdrop, the Organization of Petroleum Exporting Countries and its allies will hold a virtual meeting to try and hammer out an agreement to curb supply and prevent the world drowning in unwanted crude. Below is a reminder of how consumption has been affected in various countries.
U.S. oil demand has now fallen to 14.4 million barrels a day, the lowest in data going back to 1990 and a drop of more than 30% from pre-crisis levels, government figures showed Wednesday. In its short-term outlook, the EIA forecast the hit to oil demand will be 16.7 million barrels a day in April. A number of U.S. refiners, including HollyFrontier Corp. and Marathon Petroleum Corp., cut run rates by 30%.