IEA Believes Global Oil Demand to Fall by 8.6Mln Bpd in 2020

© AP Photo / Eric GayThe sun sets behind an idle pump jack near Karnes City, Texas, Wednesday, April 8, 2020. Demand for oil continues to fall due to the new coronavirus outbreak
The sun sets behind an idle pump jack near Karnes City, Texas, Wednesday, April 8, 2020. Demand for oil continues to fall due to the new coronavirus outbreak - Sputnik International
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MOSCOW (Sputnik) - The International Energy Agency (IEA) said on Thursday that the global oil demand in 2020 would fall by 8.6 million barrels per day, revising downward its previous report.

"Although 2H20 will be slightly weaker than previously forecast, our outlook for 2020 as a whole shows a demand fall of 8.6 mb/d, 0.7 mb/d more than in our previous Report. A resurgence of Covid-19 is a major risk factor for demand," IEA said in its fresh oil market report.

The agency said that the demand drop in the first half of the year could be not as steep as initially expected.

"We have raised our estimates for 2Q20 by circa 3.2 mb/d on evidence of stronger than expected mobility in some European countries and the US. We have also increased our Chinese demand figures for March and April. Together, these moves suggest that the decline in oil demand during 1H20 may not be as steep as first feared," IEA said.

However, the agency downgraded its forecast for the second half of the year.

"On the other hand, we have slightly revised down our expectations for the second half of 2020 and now expect demand to fall by 4.6 mb/d y-o-y, versus the 4.3 mb/d we saw last month," the report read on.

Global Oil Supply to Fall to 9-Year-Low in May as OPEC+ Deal Takes Effect

Global oil supply will fall in May to a nine-year-low of 88 million barrels per day, as the new OPEC+ oil production cuts deal will take effect, the IEA said.

"Global oil supply is set to fall by a spectacular 12 mb/d in May to a nine-year low of 88 mb/d, as the OPEC+ agreement takes effect and production declines elsewhere. For some OPEC countries, e.g. Saudi Arabia, Kuwait and the UAE [United Arab Emirates], lower May production is from record highs in April. Led by the United States and Canada, April supplies from countries outside of the deal were already 3 mb/d lower than at the start of the year," the IEA said in its fresh oil market report.

OECD Commercial Oil Stocks 46.7Mln Barrels Above 5-Year-Average in March

The commercial oil stocks in the member states of the Organization for Economic Cooperation and Development (OECD) grew in March by 68.2 million barrels and stood 46.7 million barrels above the five-year-average, IEA said.

"OECD data for March show that industry stocks rose by 68.2 mb (2.2 mb/d) to 2 961 mb. Total OECD stocks stood 46.7 mb above the five-year average and, due to the weak outlook, now provide an incredible 90 days of forward demand coverage," the IEA said in its new oil market report.

IEA Chief Sees Signs of Gradual Rebalancing of Oil Markets Following Crisis 

The International Energy Agency starts to notice the signs of a gradual stabilization of the oil markets following a tough energy crisis last month, IEA Executive Director Fatih Birol said Thursday.

"Globally, we see early signs of a gradual rebalancing of oil markets. It is still gradual and it still fragile. We see several uncertainties ranging from the developments related to coronavirus in different countries and globally. Global economic recovery efforts and also the policies in some key producing countries," Birol said at a press conference.

In April, the oil prices reached historic lows and turned negative at the exchange, as the energy demand had fallen significantly in light of the COVID-19 outbreak, lockdown measures and economic meltdown.

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