The International Energy Agency (IEA) in its September Oil Market Report (OMR) revised down its global oil demand growth forecast, citing continued teleworking and the weak recovery in the aviation sector. According to the Paris-based agency, worldwide oil demand would fall by 8.4 million bpd in 2020, compared to 2019, a further downward adjustment from a decline of 8.1 million bpd from its previous forecast. For next year, global oil consumption is expected to rise by 5.5 million bpd led by a strong recovery in China.
According to the agency, oil demand fell by 10.5 million bpd year-on-year during January-July. Demand began to pick up after easing in lockdown measures, but the curve has flattened out. Oil demand is expected to decrease by 0.1 million bpd and 0.6 million bpd in the third and fourth quarters of this year, respectively.
On the other hand, global oil supply rose by 1.1 million bpd to 91.7 million bpd in August as OPEC+ eased their coordinated output cuts. However, global supply remained 9.3 million bpd lower compared to a year earlier. Oil supply from non-OPEC producers is expected to decrease by 2.6 million bpd in 2020, before modestly increasing by 0.5 million bpd in 2021. Rising supply has weighed on Brent futures prices which fell from $46.16/barrel in late August to below $40/barrel recently.
