Released August 25, 2020 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Oil demand in 2020 is expected to fall further than previously expected by between 8 million-9 million barrels per day (BBL/d) according to separate reports from the International Energy Agency (IEA) and OPEC, the Organization of the Petroleum Exporting Countries.
OPEC expects global oil demand growth to decline by 9.1 million BBL/d while the IEA has reduced its demand figure by 8.1 million BBL/d for the year--the equivalent of 140,000 BBL/d. OPEC blamed the larger than predicted drop on lower economic activity levels in a few major developing, non-OECD countries. The IEA's report was the first downgrade in several months and reflected the stalling of mobility as the number of COVID-19 cases remained high combined with weakness in the aviation sector. For 2021, world oil demand growth is forecast to rise by 7 million BBL/d to 97.6 million BBL/d in 2021. However, the forecast assumes that COVID-19 will largely be contained globally, with no further major disruptions to the global economy, OPEC warned. The IEA has revised down its 2021 global demand estimate by 240,000 BBL/d to 97.1 million BBL/d, mainly due to aviation sector weakness.
"Recent mobility data suggest the recovery has plateaued in many regions, although Europe, for now, remains on an upward trend," stated the IEA in its August report. "For road transport fuels, demand in the first half of 2020 was slightly stronger than anticipated, but for the second half we remain cautious and the upsurge in COVID-19 cases has seen us downgrade our estimates, mainly for gasoline. For diesel, there is evidence that the recovery in business and industrial activity combined with ongoing growth in e-commerce are supporting trucking activity as more goods are delivered to customers." It added: "Jet fuel demand remains the major source of weakness. In this Report, revised data show that in April the number of aviation kilometres travelled was nearly 80% down on last year and in July the deficit was still 67%. With few signs that the picture will improve significantly soon, we have downgraded our estimate for global jet fuel and kerosene demand. In 2020, demand will be 4.8 million barrels a day, or 39%, below the 2019 level, and in 2021 the year-on-year recovery will be just below 1 million BBL/d. These are the main components of a revision to the total 2020 oil demand picture from a decline of 7.9 million BBL/d seen in the last Report to 8.1 million BBL/d in this edition. For 2021, we have reduced the expected rebound in growth to 5.2 million BBL/d from 5.3 million BBL/d seen previously."
On the global oil supply front, IEA stated that supplies rose 2.5 million BBL/d to 90 million BBL/d in July after Saudi Arabia ended its voluntary 1 million BBL/d cut, the UAE exceeded its OPEC+ target and U.S. production started to recover. Global supply looks set to fall by 7.1 million BBL/d in 2020 and rise by 1.6 million BBL/d next year.
Global refinery intake is recovering, but the pace will lag behind the demand rebound as product inventory levels are very high. In July, crude runs are estimated at 3.7 million BBL/d above the low point in May, IEA reported, with another 5.6 million BBL/d ramp-up expected by end-2020. In 2020, runs will decline by 6.9 million BBL/d but in 2021 they will rebound by only 4.5 million BBL/d. Runs in 2021 will be 2.7 million BBL/d below the historical peak seen in 2018.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
OPEC expects global oil demand growth to decline by 9.1 million BBL/d while the IEA has reduced its demand figure by 8.1 million BBL/d for the year--the equivalent of 140,000 BBL/d. OPEC blamed the larger than predicted drop on lower economic activity levels in a few major developing, non-OECD countries. The IEA's report was the first downgrade in several months and reflected the stalling of mobility as the number of COVID-19 cases remained high combined with weakness in the aviation sector. For 2021, world oil demand growth is forecast to rise by 7 million BBL/d to 97.6 million BBL/d in 2021. However, the forecast assumes that COVID-19 will largely be contained globally, with no further major disruptions to the global economy, OPEC warned. The IEA has revised down its 2021 global demand estimate by 240,000 BBL/d to 97.1 million BBL/d, mainly due to aviation sector weakness.
"Recent mobility data suggest the recovery has plateaued in many regions, although Europe, for now, remains on an upward trend," stated the IEA in its August report. "For road transport fuels, demand in the first half of 2020 was slightly stronger than anticipated, but for the second half we remain cautious and the upsurge in COVID-19 cases has seen us downgrade our estimates, mainly for gasoline. For diesel, there is evidence that the recovery in business and industrial activity combined with ongoing growth in e-commerce are supporting trucking activity as more goods are delivered to customers." It added: "Jet fuel demand remains the major source of weakness. In this Report, revised data show that in April the number of aviation kilometres travelled was nearly 80% down on last year and in July the deficit was still 67%. With few signs that the picture will improve significantly soon, we have downgraded our estimate for global jet fuel and kerosene demand. In 2020, demand will be 4.8 million barrels a day, or 39%, below the 2019 level, and in 2021 the year-on-year recovery will be just below 1 million BBL/d. These are the main components of a revision to the total 2020 oil demand picture from a decline of 7.9 million BBL/d seen in the last Report to 8.1 million BBL/d in this edition. For 2021, we have reduced the expected rebound in growth to 5.2 million BBL/d from 5.3 million BBL/d seen previously."
On the global oil supply front, IEA stated that supplies rose 2.5 million BBL/d to 90 million BBL/d in July after Saudi Arabia ended its voluntary 1 million BBL/d cut, the UAE exceeded its OPEC+ target and U.S. production started to recover. Global supply looks set to fall by 7.1 million BBL/d in 2020 and rise by 1.6 million BBL/d next year.
Global refinery intake is recovering, but the pace will lag behind the demand rebound as product inventory levels are very high. In July, crude runs are estimated at 3.7 million BBL/d above the low point in May, IEA reported, with another 5.6 million BBL/d ramp-up expected by end-2020. In 2020, runs will decline by 6.9 million BBL/d but in 2021 they will rebound by only 4.5 million BBL/d. Runs in 2021 will be 2.7 million BBL/d below the historical peak seen in 2018.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
