The Organization of the Petroleum Exporting Countries in its June Monthly Oil Market Report (MOMR) maintained its forecast that global oil demand would decline by 9.1 million bpd in 2020. The coronavirus pandemic has dented worldwide economic activities, dragging global oil demand to fall by 6.4 million bpd year-on-year in 1Q20 and by 17.3 million bpd in 2Q20. For 2H20, OPEC expects global oil demand to decrease by 6.4 million bpd, following a decline of 11.9 million bpd in 1H20, as demand is projected to gradually recover through the end of the year.
Demand for transportation fuels is forecast to remain depressed in 2H20 although containment measures have been relaxed. A slow recovery in the number of domestic and international flights are expected to keep aviation fuel demand under pressure. Reduced commuting and the high unemployment rate in the US will also weigh on gasoline consumption. Besides, demand for industrial fuels is expected to remain low amid continued weakness in global manufacturing activities.
Demand for petrochemical feedstock will face challenges from slower end-user requirements for plastics and plastic products. The unexpected and unprecedented impact of the coronavirus pandemic has created a highly uncertain outlook. OPEC said that it might make revisions in its outlook for the near term, depending on term new data and market developments.
