The International Energy Agency (IEA) on Thursday lowered its forecasts of world oil demand for 2020 and 2021 given the weakness of the transport sector, especially the air transport sector, with the health crisis.
Crude demand is expected to fall this year to 91.9 million barrels per day (mb / d), or 140,000 barrels per day less than previously forecast, before rebounding to 97.1 mb / d. next year, 240,000 less than expected. The reason among others is the demand for transport which has collapsed due to the pandemic.
“The air and land transport sectors, both of which are essential components of oil consumption, continue to experience difficulties,” notes the IEA in its monthly petroleum report.
The Paris-based agency, which advises developed countries on their energy policy, explains in particular that it has lowered its outlook for next year because “the airline sector will probably take longer to recover”.
The Covid-19 pandemic has in fact almost brought air traffic to a halt, which is now resuming very slowly.
According to statistics cited by the IEA, world traffic in July was still down by two thirds compared to normal, after -75% in June and -79% in May.
“Business travel will remain very reduced globally until a vaccine is found, while leisure travel will be mainly limited to domestic and short-haul flights,” said the IEA.
These difficulties in transport and the fall in activity in general had led the IEA to anticipate a historic collapse in demand for crude this year. It should bounce back next year but without returning to 2019 levels.
“Rebalancing the market remains delicate”
Faced with this situation, the producing countries ended up adjusting the supply of crude oil to support prices which collapsed with the crisis and have now stabilized.
However, production started to rise again in July, notes the IEA. The organization of oil-exporting countries (OPEC) had thus indicated Wednesday to have pumped more last month, in particular Saudi Arabia.
“The current uncertainty regarding demand, due to Covid-19, with the possibility of increased production, means that the rebalancing of the market remains delicate”, warns the IEA.