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The International Energy Agency reduced its forecast for global oil demand for the first time in several months on Thursday, while the number of Covid-19 infections remains high and amid persistent weakness in the aviation sector.
This revised forecast is 140,000 barrels consistent with a daily decrease than the previous IEA projection.
The firm also revised downward its 2021 oil estimate from 240,000 barrels consistent with the day to 97.1 million barrels with the day, and the kerosene application is known as the “main source” of weakness.
The report comes shortly after the world’s largest oil and fuel corporations reported historic losses in the last quarter, as coronavirus blocking measures led to an unprecedented surprise call in energy markets.
Earlier this year, IEA executive director Fatih Birol told reporters that 2020 could be the worst year in oil market history.
“Recent knowledge on mobility recommends that the recovery has stabilized in many regions, although Europe, for now, is still trending upwards,” the EIG said on Thursday.
“For road transport fuels, demand in the first part of 2020 was more powerful than expected, but for the time being part of the year we remain cautious and the resurgence of Covid-19 instances has led us to lower our estimates, basically for gasoline. . “
Foreign Brent benchmark futures traded at $45.29 Thursday morning, more than 0.3% lower, while West Texas Intermediate futures fell 0.4% to $42.52.
Oil costs have fallen by more than 25% since the beginning of the year.
The coronavirus outbreak “has a long shadow” over oil demand, the EIG said in its report on the oil market.
The Paris-based energy company said aviation and transport, two key parts of oil consumption, continued to fight in the wake of the pandemic.
He estimated that air activity, measured in passenger-kilometres, was reduced by about two-thirds of overall July levels, one of the peak months for air traffic.
Meanwhile, July’s mobility knowledge showed that fuel demand remained seasonal in Europe and North America. The same figures were “much worse” in regions where the virus continues to spread rapidly, the EIG said, pointing to Latin America and India as two examples.
The number of new cases of international coronavirus has reached its peak since the early days of the pandemic earlier this month.
The IEA said the global source of oil was under the impression of falling to 7.1 million barrels according to the day in 2020 and accumulated at 1.6 million barrels according to next year’s day.
He added that the oil source had risen through 2.5 million barrels according to the day to 90 million barrels according to the day of July, after OPEC leader Saudi Arabia stopped its voluntary production cut, the United Arab Emirates exceeded its OPEC target and US production began to recover.
“Our balance sheets show that in June, they demand oversupply, and for the rest of the year there is an implicit inventory draw,” the IEA said.
“However, the uncertainty around the call through Covid-19 and the option of higher production means that the rebalancing of the oil market remains delicate.”
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