The International Energy Agency (IEA) on Thursday cut its 2020 oil demand forecast for the first time in several months due to the COVID-19 pandemic which is expected to continue weighing on cross-border air travel. IEA now expects global consumption to stand at 91.9 million bpd in 2020 after cutting its expectation by 140,000 bpd.
The Paris-based agency said the number of aviation kilometres travelled fell by 80% year-on-year in April. It improved in July but remained 67% below the year-ago level. Meanwhile, the road transport sector is expected to continue struggling to recover and hence, unable to offset the slump in the aviation sector.
IEA noted that re-balancing oil markets would be delicate, as producers are set to increase their supplies while future demand remains uncertain. OPEC+ producers will ease their production cuts, while other producers such as the US, Canada, and Brazil are expected to follow suit.
