Global oil demand to fall by 8.4mpd for the rest of 2020 – IEA

The International Energy Agency has forecasted that global oil demand is estimated to remain fragile slowing down by 8.4 million barrel per day in 2020. 

The Paris-based agency had earlier this year projected an estimated global oil demand of 8.1m bpd.

According to the energy agency, increase in Covid-19 infections  globally, influenced its forecast.

“The uncertainty created by Covid-19 shows little sign of abating.

“In various places, the situation is worrying and we are seeing localised lockdowns. These developments weigh heavily on economic activity and lead to lower expectations for a recovery in energy demand,” IEA said.

Demand during seven months between January and July averaged 10.5m bpd below the levels seen last year. 

The initial pick-up in demand from the easing of lockdowns has flattened as Covid-19 infections surge in many places. 

The Paris-based agency expects demand to fall even further by 8.4 million barrels per day in 2020, compared to its earlier estimate of 8.1m bpd. 

The revised projections are a result of “continued teleworking and weak aviation sector”. 

The IEA also slashed its demand estimates for the third and fourth quarters of 2020 by 100,000 bpd and 600,000 bpd, respectively. 

Meanwhile, OPEC Monday cut its oil demand projection by a further 400,000 bpd for this year, despite a pick-up in consumption from OECD countries. 

Oil demand is expected to decline by 9.5m bpd, resulting in overall demand of 90.2m bpd this year, according to the oil cartel. 

OPEC’s forecast did not however affect the market as prices of crude oil edged slightly higher Tuesday afternoon after it recorded a fall Monday.

The price of Brent Crude was trading at $40.14, gaining 1.34 per cent just as a barrel of West Texas Intermediate (WTI) traded at $37.86, gaining 1.61 per cent.

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