Yemisi Izuora
The U.S Energy Information Administration, EIA, has stated that U.S. oil demand is set to crash by about 2.2 million barrels per day (bpd) in 2020 to 18.29 million bpd.
The agency said on Tuesday, that the COVID-19 pandemic has continued to erode demand and restricted movement across the world.
Meanwhile, U.S. crude production is expected to fall by 540,000 barrels per day (bpd) this year to 11.69 million bpd, the agency said, compared with its previous forecast for a decline of 470,000 bpd.
The EIA said it expects U.S. motor gasoline consumption to fall to an average of 7 million bpd in the second quarter from 8.6 million bpd in the first quarter, and gradually increase to 8.7 million bpd in the second half of the year.
The statistical arm of the U.S. Department of Energy also cut its 2020 world oil demand growth forecast by 2.9 million bpd to 8.13 million bpd.
Fears about a second wave of the virus have gripped markets this week and weighed on oil prices.
Germany reported on Monday that new coronavirus infections were accelerating exponentially after early steps to ease its lockdown while Wuhan, the epicentre of the outbreak in China, reported its first cluster of infections since the city’s lockdown was lifted a month ago.
For 2021, global and U.S. oil demand is expected to rise, the EIA said in its monthly forecast.
U.S. crude output for 2021 is expected to slide further, declining by about 790,000 bpd to 10.9 million bpd compared with a previous forecast for a drop of 730,000 bpd.