Global oil demand in 2020 is forecast to fall by 9.3 million barrels per day (mbpd) due to the fall in consumption linked with the worldwide lockdown following the coronavirus pandemic, the International Energy Agency (IEA) said in its April oil market report.
The report noted that “containment measures in 187 countries and territories” had brought mobility to a an almost halt across the globe.
The figures come on the back of estimates by the International Monetary Fund (IMF), predicting a global economic contraction this year of around 5 percent.
Oil demand in April is estimated to be 29 mbpd lower than a year ago, down to a level last seen in 1995, the report noted, adding that the recovery in the second half of the year is likely to be gradual. Further drops in demand in May and June are likely, but at a lower pace.
The situation could shave 26 mbpd off demand in May and a 15 mbpd drop is forecast in June, the IEA said.
At the same time, supply has plummeted a record 12 mbpd during May after the OPEC group and associate producers agreed to cut output by 9.7 mbpd.
“Additional reductions are set to come from other countries with the US and Canada seeing the largest declines,” the IEA said.
“Total non-OPEC output falls could reach 5.2 mb/d in the last quarter of this year, with annual production being drawn down by 2.3 mbpd,” it was forecast.
Refining activity this year is also projected to fall by 7.6 mbpd to 74.3 mbpd compared with 2019, due to a sharp drop in demand, the report added.
The IEA urged producers and consumers to cooperate to balance the markets but noted this would take some time.
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