The International Energy Agency has revised down its forecasts for oil consumption this year and next as a recovery in global demand slows. The Paris-based agency said global oil demand would average 91.9m barrels a day in 2020, down 8.1m b/d year on year and 140,000 b/d lower than last month’s forecast. The IEA’s 2021 demand forecast was lowered by 240,000 b/d to 97.1m b/d, a level still about 3m b/d below the pre-crisis peak.
In its monthly report the IEA said it was “the first downgrade in several months, reflecting the stalling of mobility as the number of Covid-19 cases remains high and weakness in the aviation sector”. “Recent mobility data suggest the recovery has plateaued in many regions, although Europe, for now, remains on an upward trend. 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,” it said.
Global oil supply is expected to be roughly steady in August despite Saudi Arabia leading Opec in starting to add back some production, as other members of the cartel compensate for being slower to reduce production earlier in the year.
The IEA said the drop in production in the US and Opec-led production cuts implied the oil market would be in a small deficit in the second half of the year, but the level of uncertainty oversupply and demand meant any recovery was “delicate”.