International Energy Agency downgraded its forecast for oil demand

World Energy Outlook 2020

International Energy Agency downgraded its forecast for oil demand

The International Energy Agency lowered its forecasts for global oil demand for the first time in months as the number of Covid-19 infections remains high, affecting the demand of the aviation sector.

International Energy Agency downgraded its forecast for oil demand

The IEA’s monthly report states that today global oil demand in 2020 stands at 91.1 million barrels per day, reflecting a drop of 8.1 million barrels per day on an annualized basis..

This revised forecast is 140 thousand barrels per day lower than the agency’s previous forecast.

The agency also revised its estimate of global oil demand in 2021 by 240,000 barrels per day to 97.1 million barrels, with weak demand for jet fuel was defined as «main source» lower expectations.

The report comes out shortly after the world’s largest oil and gas companies reported historical losses in the second quarter, as quarantine measures worldwide led to an unprecedented drop in demand in energy markets.

Earlier this year, IEA Executive Director Fatih Birol told reporters that 2020 could very well be the worst year in the history of oil markets.

«Recent data suggests recovery has occurred in many regions, although Europe remains in an uptrend for now», – said in a release by the IEA on Thursday.

International Energy Agency downgraded its forecast for oil demand

«For road fuel, demand in the first half of 2020 was slightly stronger than expected, but our expectations remain cautious in the second half. Rising Covid-19 Cases Lead to Downgrading Our Estimates for Gasoline», – agency writes.

International benchmark Brent crude oil futures traded at $ 45.29 on Thursday morning, while crude oil futures West Texas Intermediate brands were at $ 42.52, sipping about 0.4%.

International Energy Agency downgraded its forecast for oil demand

Oil prices fell more than 25% year on year.

Coronavirus outbreak darkens expectations for oil demand growth, IEA report says.

Paris-based energy agency says aviation and transport, critical components of oil consumption, continue to grapple with the effects of the pandemic.

Aviation activity is down about two-thirds from pre-crisis standard levels in July, which tends to be one of the peak months for air traffic..

July data showed fuel demand in Europe and North America remains below seasonal norms. However, in Latin America and India, these numbers are even worse..

The number of new daily cases of coronavirus in the world reaches its highest level since the early days of the pandemic earlier this month.

To date, according to Johns Hopkins University, more than 20.6 million people have become infected with COVID-19.

The IEA said global oil supplies are likely to drop 7.1 million barrels a day in 2020 and rise 1.6 million barrels a day next year..

It added that shipments of black gold rose 2.5 million barrels per day to 90 million barrels in July after OPEC leader Saudi Arabia stopped voluntary production cuts, the United Arab Emirates exceeded its OPEC + target, and production in the United States began to recover.

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