The International Energy Agency (IEA) on Friday said that re-imposed lockdown in Latin and North America as well as the resurgence of COVID-19 cases cast a cloud in the global oil market outlook. This is despite the fall in crude production which continued through June.
The agency now expects global oil demand to reach 92.1 million bpd in 2020, 400,000 bpd higher than its previous outlook last month, citing economic activity recovery. It also said that the worst might have passed for the oil market after demand plunged at an unprecedented pace in April and May when four billion people were told to stay at their homes.
Despite the upward revision, IEA warned that the health crisis is far from over. In fact, the World Health Organization on Friday said that the pandemic is accelerating. New Covid-19 cases increased steadily and forced authorities to re-impose lockdowns in some areas in North and Latin America. This is casting a cloud over the outlook for the oil market, IEA said.
The agency said that demand would continue to decline in the second half of 2020, although the decline would likely slow down from a 10.75 million bpd year-on-year fall in the first half. The expected demand for the whole year remains lower than last year’s consumption even after the upward revision. Demand in 2021 is also forecast to remain 2.6 million bpd below the 2019 level.
