The International Energy Agency on Tuesday cut its forecast for 2020 oil demand growth, citing a “treacherous” path ahead amid weakening market sentiment and an upsurge in the number of coronavirus cases reported across the globe, Report says.
In a closely-watched monthly report, the IEA trimmed its outlook for worldwide oil demand growth to 91.7 million barrels per day. That marks a contraction of 8.4 million BPD year-on-year, more than the 8.1 million BPD contraction predicted in the Paris-based energy agency’s August report.
“We expect the recovery in oil demand to decelerate markedly in the second half of 2020, with most of the easy gains already achieved,” the IEA said.
“The economic slowdown will take months to reverse completely, while certain sectors such as aviation are unlikely to return to their pre-pandemic levels of consumption even next year.”
Energy market participants have become increasingly anxious about a faltering economic recovery and stumbling fuel demand in the wake of the coronavirus pandemic.
The global health crisis has coincided with an unparalleled energy demand shock this year. With the IEA previously warning the fall in oil demand growth in 2020 could be the largest in history.
Looking ahead, the IEA said it expected worldwide oil demand to grow by around 5.5 million bpd next year, climbing to an average of 97.1 million bpd in 2021.