BAKU, Azerbaijan, Aug.17
By Leman Zeynalova – Trend:
The global jet fuel demand will not sustainably break above 2019 levels until 2023, Trend reports with reference to the US JP Morgan Bank.
“As a result, our forecasts never called for global oil demand normalizing to its pre-COVID volumes this year, yet alone exceeding those. In short, we believed that our demand forecasts were incorporating the lingering depressive impacts of different coronavirus strains. Yet, it now appears we were not cautious enough. While in some regions like Europe, the US, and Latin America demand remains buoyant, the recent surge in cases in China from late July, and China’s strong adherence to its zero tolerance policy toward the virus, prompts us to slash our Chinese oil demand assumptions by 650 kbd in August and 420 kbd in September.
This, combined with cuts to other Asian demand, drives the majority of our 1 mbd downgrade to global oil demand in 3Q21. Consequently, we now see the global demand recovery stalling this month with oil demand only reaching 98.3 mbd in August and averaging 97.9 mbd in September, on par with the nearly 98 mbd average in July. That being said, we expect the COVID situation will improve in China next month and again in October, and have only trimmed our 4Q21 demand by about 160 kbd and for now still see global demand recovering to average around 99.4 mbd in 4Q21,” reads the latest JP Morgan report.
About one-third of the 3Q demand downgrades have been offset by cuts to supply with production averaging about 300 kbd lower than the Bank’s forecast for the quarter. The misses in JP Morgan’s model are all coming from OPEC 13 countries with Congo, Equitorial Guinea, Nigeria, and Venezuela falling short.
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Follow the author on Twitter: @Lyaman_Zeyn
