Global oil demand will decrease by 2.8 per cent or 2.8mn bpd per day year-on-year as the spread of coronavirus continue to escalate, according to consultant Rystad Energy
With travel restrictions and quarantine obligations being announced daily, global oil demand is now projected to decline to 97.1mn bpd per day 2020.
Rystad expects the month of April to take the biggest hit, with demand for oil falling by as much as 11mn bpd per day y-o-y,
This downgrade takes into account developments that happened within the course of last week such as the new quarantine lockdowns across Europe and the declaration of a state of emergency in the US, as well as our updated simulations of the virus’ growth patterns this year, the consultant added.
Road fuel demand:
Rystad believes that global demand for road fuels will fall by 2.2 per cent, or 1.1mn bpd y-o-y, a strong downgrade from last week’s the report, where road fuels were expected to stay mostly flat.
Almost all of this reduction will occur due to decreased road traffic in the first half of 2020. In China alone, demand for gasoline and diesel road fuel was down by about 1.5mn bpd in February.
Jet fuel demand:
Among the various fuel sectors, Rystad expects global commercial air traffic will fall by approximately 20 per cent this year versus the levels seen in 2019, which Rystad estimates stood at around 99,700 flights per day.
Many distressed airlines are now facing heavy cost cuts, laying-off unprecedented numbers of employees and many non-essential routes are likely to be closed.
Rystad now assumes that the common summer air travel peak will not occur at all this year. The consultant sees jet fuel demand falling by 12 per cent y-o-y, equating at least 800,000 bpd. Last year’s demand for jet fuel was seen at about 7.2mn bpd.