The International Energy Agency (IEA) monthly report was released Wednesday, April 15. It reveals a 9.3 Mb/d in yearly (2020) record fall of oil demand compared to last year. Coronavirus containment measure is impacting the world with 187 countries and territories almost immobilised. Global oil prices have also fallen to an 18-year low below $30 a barrel.
A summary of the IEA report on global oil demand
Global oil demand in April is estimated to be at 29 Mb/d lower than a year ago.
For the second quarter of 2020, the demand is expected to be 23.1 Mb/d below year-ago levels.
The IEA report states that the demand rate will recover in the second half of 2020. However, it will be gradual and demand in December will still be down 2.7 Mb/d year on year.
On 1 May, the OPEC+ agreement to cut output by an initial 9.7 Mb/d will go into effect. However, with a high production level in April and a decline in consumption, 10.7 Mb/d is the most effective cut. Additional reductions are set to come from other countries with the US and Canada seeing the largest declines.
Without the recent agreement hwich the G20 countries also took part in, the plunge in demand would be even more damaging for the industry.
Fatih Birol stated this on his twitter handle where he also explained that demand may exceed supply in the second half of 2020.
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