BAKU, Azerbaijan, April 16
By Leman Zeynalova - Trend:
For 2020, world oil demand growth is revised lower by a considerable 6.9 mb/d, to show a historic decline of around 6.8 mb/d, Trend reports citing OPEC’s Monthly Oil Market Report (MOMR).
The COVID-19 outbreak and its downward impact on transportation and industrial fuels in China was reflected in the country’s 1Q20 oil demand performance.
The COVID-19 pandemic is now affecting oil demand growth in many other countries and regions across the globe, with an unprecedented impact on oil requirements, in particular transportation fuels. Lockdowns in many areas, as governments seek to contain the spread of COVID-19 in the US, Europe, Other Asia, Middle East and other regions, are expected to substantially reduce distances travelled and thereby negatively affect gasoline demand growth in 2Q20.
Aviation fuel will also face serious demand challenges this year as airlines ground fleets in response to airport closures and significant reductions in flight operations. Industrial fuels will be impacted by a forecast global recession. Without exception, oil demand in all regions was revised lower as compared to the March MOMR to reflect these developments with most of the downward revisions appearing in 1H20. 2H20 was also revised lower from last month’s forecast, amid a projected sluggish recovery in product consumption, particularly transportation fuels, despite expected improving global economic momentum during the same period.
Total global oil demand is now assumed at 92.82 mb/d, in 2020 with higher consumption expected in 2H20 than in 1H20. In the OECD, oil demand was revised lower by 3.7 mb/d mainly due to the impact of COVID-19 in OECD Europe, OECD Asia Pacific and the extraordinary impact on gasoline requirements in the US. Most of the downward revisions are concentrated in 1H20. Additionally, some downward revisions are also assumed in 2H20 and reflect the slower expected pace of oil demand recovery as compared to the previous months’ assessment.
The latter relate to challenges in various large economies of the world. In the non-OECD, the oil demand projection for 2020 was adjusted sharply lower by 3.2 mb/d to reflect significant oil demand declines in all sub-regions with China and Other Asia affected the most. The onset of COVID-19 and its subsequent impact on transportation and industrial fuels is forecast to slow oil consumption by an unforeseen magnitude. Other countries in Other Asia, Middle East and Latin America have also been revised lower to reflect the reduced demand for industrial and transportation fuels.
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