Global oil demand seen to shrink in 2020 | Inquirer Business

Global oil demand seen to shrink in 2020

Worldwide oil demand is expected to contract this year for the first time since 2009, a time of a global financial crisis, as the coronavirus (COVID-19) pandemic continues to take a toll on China while worsening elsewhere.

In its latest monthly forecast for the oil market, the International Energy Agency (IEA) said it had cut its projection for 2020 by 1.1 million barrels per day (bpd).

“For the first time since 2009, demand is expected to fall year-on-year, by 90,000 bpd,” the IEA’s Oil Market report said.

Article continues after this advertisement

The report noted that, in the first quarter, China’s demand fell by 1.8 million bpd while global demand plunged 2.5 million bpd. “We assume that oil demand returns to close to normal in the second semester of 2020,” it added.

FEATURED STORIES

Since late January when analysts started noting the effects of COVID-19 on the oil market, pump prices of diesel in the Philippines have gone down by a six times in seven weeks for at a cumulative P5.25 a liter.

At the same time, pump prices of gasoline went down five times in seven weeks for a total of P4.15 a liter.

Article continues after this advertisement

The IEA also said that the impact of COVID-19 on the global economy was becoming more apparent, with estimates on growth for 2020 being revised downward.

Article continues after this advertisement

The Paris-based group said the Organization for Economic Cooperation and Development has lowered its estimate by 0.5 percentage point to 2.4 percent. This revision is factored in IEA’s latest projections.

Article continues after this advertisement

“While the situation remains fluid, we expect global oil demand to fall in 2020—the first full-year decline in more than a decade—because of the deep contraction in China … and major disruptions to travel and trade,” the IEA said.

In a statement, IEA executive director Fatih Birol said virus crisis was also affecting other energy markets, such as coal, gas and renewable energy, but the impact was worst on oil because this was preventing the movement of people and goods—dealing a heavy blow on demand for transportation fuel.

Article continues after this advertisement

“This is especially true in China, the largest energy consumer in the world, which accounted for more than 80 percent of global oil demand growth last year,” Birol said. “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.”

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

For more news about the novel coronavirus click here.
What you need to know about Coronavirus.
For more information on COVID-19, call the DOH Hotline: (02) 86517800 local 1149/1150.

The Inquirer Foundation supports our healthcare frontliners and is still accepting cash donations to be deposited at Banco de Oro (BDO) current account #007960018860 or donate through PayMaya using this link.

TAGS: COVID-19, oil demand

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our newsletter!

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2024 INQUIRER.net | All Rights Reserved

This is an information message

We use cookies to enhance your experience. By continuing, you agree to our use of cookies. Learn more here.