As people around the world forced by the coronavirus to avoid all unnecessary travel and remain indoors, global oil demand is being destroyed. Currently, between a third and a half of the world’s population are in lockdown, meaning few people are flying, driving, or doing much that would require the use of crude or its derivatives.
With uncertain futures faced by refiners, producers and even petrostates, the ramifications for the oil market are huge. The least gasoline consumed by US drivers for at least 30 years, the US Energy Information Administration reported on Wednesday.
This month, crude demand could slump by 27 million barrels a day, Rystad Energy data showed. The current hit to consumption is estimated by Trafigura Group to around 35 million barrels a day.
As the planet’s largest national lockdown endured in India, crude demand in the country has collapsed by as much as 70 percent. US oil demand has now fallen to 14.4 million barrels a day, a drop of more than 30 percent from pre-crisis levels and the lowest in data going back to 1990.
Oil product demand in Spain fell by 23 percent in March. With gasoline and road diesel falling by 35.5 percent and 26.5 percent respectively, air and road fuel consumption were the most affected. Providing a glimmer of hope to a global market reeling from the virus, oil refineries in China may increase processing rates to near last year’s average levels this month.
