…As Expert Sees Global Demand Falling By 4.9 Million Barrels A Day In 2020
Yemisi Izuora
Oil prices were mixed on Thursday following three days of gains, with the prospect of rapidly dwindling demand due to coronavirus travel bans and lockdowns offsetting hopes a U.S. $2 trillion emergency stimulus will shore up economic activity.
West Texas Intermediate (WTI) crude futures slipped 4 cents, or 0.2 per cent to $24.45, while Brent crude futures rose 12 cents, or 0.4 per cent to $27.51.
“With lockdowns in many countries, expectations of oil demand contracting by more than 10 million barrels per day (bpd) are rising.
Such demand loss will increase the supply glut,” Australia and New Zealand Banking Group analysts said in a note.
The collapse of a supply-cut pact between the Organization of the Petroleum Exporting Countries (OPEC) and other producers led by Russia is set to boost oil supply, with Saudi Arabia planning to ship more than 10 million bpd from May.
“Production increases by Saudi Arabia and Russia loom, and things still look uncertain due to the ongoing price war between these two countries,” ANZ said.
U.S. crude inventories rose by 1.6 million barrels in the most recent week, the U.S. Energy Information Administration said on Wednesday, marking the ninth straight week of increases.
Meanwhile, Norway’s biggest independent energy consultancy Rystad Energy said on Wednesday, that global oil demand could fall by as much as 4.9 million barrels per day (bpd), or by about 4.9 per cent in 2020 due to the coronavirus outbreak,
The consultancy had forecast last week it would fall by 2.8 million bpd in 2020.
Rystad said oil demand in the month of April was forecast to fall by 16 million bpd, compared to a year earlier.
Rystad forecast a fall in jet fuel demand year on year of 20 per cent or 1.4 million bpd, while air traffic was expected to drop 8 per cent. It said demand for vehicle fuel would fall 5.6 per cent or by 2.8 million bpd, year on year.