The outbreak may impact global oil demand more than expected

Source: World Energy Network Time: 2020-02-26

The head of the International Energy Agency (IEA) said on Tuesday that the outbreak of coronavirus may have a greater impact on global oil demand growth than currently expected. He added that the agency may further lower its oil demand growth forecast.

IEA executive director Fatih Birol said at an energy conference in London today: \"We will definitely see the lowest growth in oil demand in the past decade, and we may need to lower it.\" \"

The coronavirus outbreak is spreading to international events. This is the regular holding of the International Petroleum Week in London this week, but due to the outbreak, many participants cancelled receptions and events at the meeting. Sources said last week that major international oil traders and refineries have canceled networking activities.

The head of the Paris-based agency issued the above comment when the coronavirus spread outside Asia, causing oil prices to plummet by more than 4%, threatening global economic growth, and increasing concerns about further losses in oil demand growth.

Earlier this month, the IEA stated in its \"Oil Market Report\" that the outbreak of coronavirus will cause the first quarterly contraction in global oil demand in 10 years. The IEA lowered its 2020 oil demand growth forecast by 365,000 bpd to only 825,000 bpd, which will be the lowest oil demand growth since 2011.

Now, according to the prediction of the IEA's Birol, due to the outbreak of coronavirus, even the lowered prediction value can be further lowered.

Earlier this month, OPEC also lowered its forecast for global oil demand growth in 2020. It is expected that the outbreak of coronavirus will seriously affect the fuel demand of China, the global oil demand growth driver. OPEC lowered its oil demand growth forecast by 230,000 barrels/day from last month’s assessment. It is now expected that global oil demand growth will be slightly lower than 1 million barrels/day, or 990,000 barrels/day.

Due to the outbreak of coronavirus, EIA also lowered its forecast for oil demand growth this year by 378,000 bpd.