{"id":8059,"date":"2020-03-11T14:46:45","date_gmt":"2020-03-11T14:46:45","guid":{"rendered":"http:\/\/oilnewskenya.com\/?p=8059"},"modified":"2020-03-11T14:49:16","modified_gmt":"2020-03-11T14:49:16","slug":"global-oil-demand-to-decline-in-2020-as-coronavirus-weighs-heavily-on-markets-iea","status":"publish","type":"post","link":"https:\/\/www.oilnewskenya.com\/index.php\/global-oil-demand-to-decline-in-2020-as-coronavirus-weighs-heavily-on-markets-iea\/","title":{"rendered":"Global oil demand to decline in 2020 as coronavirus weighs heavily on markets – IEA"},"content":{"rendered":"

Global oil demand is expected to decline in 2020 as the impact of the new coronavirus (COVID-19) spreads around the world, constricting travel and broader economic activity, according to the\u00a0International Energy Agency\u2019s latest oil market forecast<\/em><\/a>.<\/p>\n

The situation remains fluid, creating an extraordinary degree of uncertainty over what the full global impact of the virus will be. In the IEA\u2019s central\u00a0base case<\/em><\/strong>, demand this year drops for the first time since 2009 because of the deep contraction in oil consumption in China, and major disruptions to global travel and trade.<\/p>\n

‘The coronavirus crisis is affecting a wide range of energy markets \u2013 including coal, gas and renewables \u2013 but its impact on oil markets is particularly severe because it is stopping people and goods from moving around, dealing a heavy blow to demand for transport fuels,’\u00a0<\/em>said Dr Fatih Birol, the IEA\u2019s Executive Director.\u00a0‘This is especially true in China, the largest energy consumer in the world, which accounted for more than 80% of global oil demand growth last year. While the repercussions of the virus are spreading to other parts of the world, what happens in China will have major implications for global energy and oil markets.’<\/em><\/p>\n

The IEA now sees global oil demand at 99.9 million barrels a day in 2020, down around 90,000 barrels a day from 2019. This is a sharp downgrade from the IEA\u2019s forecast in February, which predicted global oil demand would grow by 825,000 barrels a day in 2020.<\/p>\n

The short-term outlook for the oil market will ultimately depend on how quickly governments move to contain the coronavirus outbreak, how successful their efforts are, and what lingering impact the global health crisis has on economic activity.<\/p>\n

To account for the extreme uncertainty facing energy markets, the IEA has developed two other scenarios for how global oil demand could evolve this year. In a more pessimistic\u00a0low case<\/em><\/strong>, global measures fail to contain the virus, and global demand falls by 730,000 barrels a day in 2020. In a more optimistic\u00a0high case<\/em><\/strong>, the virus is contained quickly around the world, and global demand grows by 480,000 barrels a day.<\/p>\n

‘We are following the situation extremely closely and will provide regular updates to our forecasts as the picture becomes clearer,’<\/em>\u00a0Dr Birol said.\u00a0‘The impact of the coronavirus on oil markets may be temporary. But the longer-term challenges facing the world\u2019s suppliers are not going to go away, especially those heavily dependent on oil and gas revenues. As the IEA has repeatedly said, these producer countries need more dynamic and diversified economies in order to navigate the multiple uncertainties that we see today.’<\/em><\/p>\n

The IEA also published its medium-term outlook examining the key issues in global demand, supply, refining and trade to 2025. Following a contraction in 2020 and an expected sharp rebound in 2021, yearly growth in global oil demand is set to slow as consumption of transport fuels grows more slowly, according to the report. Between 2019 and 2025, global oil demand is expected to grow at an average annual rate of just below 1 million barrels a day. Over the period as whole, demand rises by a total of 5.7 million barrels a day, with China and India accounting for about half of the growth.<\/p>\n

At the same time, the world\u2019s oil production capacity is expected to rise by 5.9 million barrels a day, with more than three-quarters of it coming from non-OPEC producers, the report forecasts. But production growth in the United States and other non-OPEC countries is set to lose momentum after 2022, allowing OPEC producers from the Middle East to turn the taps back up to help keep the global oil market in balance.<\/p>\n

The medium-term market report, Oil 2020, also considers the impact of clean energy transitions on oil market trends. Demand growth for gasoline and diesel between 2019 and 2025 is forecast to weaken as countries around the world implement policies to improve efficiency and cut carbon dioxide emissions \u2013 and as electric vehicles increase in popularity. The impact of energy transitions on oil supply remains unclear, with many companies prioritising short-cycle projects for the coming years.<\/p>\n

‘The coronavirus crisis is adding to the uncertainties the global oil industry faces as it contemplates new investments and business strategies,’\u00a0<\/em>Dr Birol said.\u00a0‘The pressures on companies are changing. They need to show that they can deliver not just the energy that economies rely on, but also the emissions reductions that the world needs to help tackle our climate challenge.’<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Global oil demand is expected to decline in 2020 as the impact of the new coronavirus (COVID-19) spreads around the world, constricting travel and broader economic activity, according to the\u00a0International … Read More<\/a><\/p>\n","protected":false},"author":24,"featured_media":8060,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[11],"tags":[406,454,7318,7351,581,600,968,1121,1160,6510,1827,1920,2082],"class_list":["post-8059","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-top-news","tag-carbon-dioxide","tag-china","tag-coronavirus","tag-covid-19","tag-demand","tag-diesel","tag-gasoline","tag-india","tag-international-energy-agency","tag-market","tag-oil","tag-opec","tag-production","entry"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/03\/IEA-2020.jpg?fit=347%2C470&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p5JWkQ-25Z","jetpack-related-posts":[{"id":8029,"url":"https:\/\/www.oilnewskenya.com\/index.php\/coronavirus-to-delay-most-of-2020s-fpso-deliveries-and-postpone-usd30-billion-of-ep-investments\/","url_meta":{"origin":8059,"position":0},"title":"Coronavirus to delay most of 2020\u2019s FPSO deliveries and postpone USD30 billion of E&P investments","author":"","date":"March 3, 2020","format":false,"excerpt":"Out of a global total of 28 floating production, storage and offloading (FPSO) vessels that are under construction, 22 are being built at shipyards in China, South Korea and Singapore.\u00a0Rystad Energy\u00a0expects the outbreak of the coronavirus disease known as COVID-19 to cause extensive staffing and supply shortages in these countries\u2026","rel":"","context":"In "Top News"","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/02\/Coral-Sul-Hull-Launch-2.jpg?fit=874%2C874&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/02\/Coral-Sul-Hull-Launch-2.jpg?fit=874%2C874&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/02\/Coral-Sul-Hull-Launch-2.jpg?fit=874%2C874&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/02\/Coral-Sul-Hull-Launch-2.jpg?fit=874%2C874&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":11409,"url":"https:\/\/www.oilnewskenya.com\/index.php\/oil-demand-back-to-pre-covid-19-levels-outside-aviation-globaldata\/","url_meta":{"origin":8059,"position":1},"title":"Oil Demand Back to Pre-COVID-19 Levels Outside Aviation -GlobalData","author":"","date":"December 16, 2021","format":false,"excerpt":"Global demand for oil products has seen strong recovery this year, however, depressed kerosene demand from the aviation sector is a major barrier to full recovery, says GlobalData, a leading data and analytics company. 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