IEA: Coronavirus promises oil economies worst year in 10 years

The growth in oil demand will be minimal in 2011.

The international energy Agency (IEA) has lowered its forecast for growth in global oil demand in 2020 by 365 thousand barrels per day to 825 thousand barrels per day – a record low in 2011 due to the effect of a new type of coronavirus. This is stated in the February report, the Agency, reports TASS.

“For 2020 we have downgraded our forecast for 365 thousand barrels per day – up to 825 thousand barrels per day – the lowest figure since 2011”, – the document says. Revised downwards and demand in 2019, – 80 thousand barrels per day – up to 885 thousand barrels a day, amid lower-than-expected figure on consumption in OECD countries.

An outbreak of coronavirus has hit the consumption of oil in China, which is the world’s largest importer of this raw material. So in the first quarter, world demand falls, according to the IEA, to 435 thousand barrels per day.

“The global demand for oil and significant negative impact of the spread of coronavirus and a broad slowdown in China’s economy. The demand for oil is expected to decrease by 435 thousand barrels per day in the first quarter of 2020, that may be the first quarterly decline (figure – approx. ) for more than 10 years,” the report says.

The IEA believe that to compare the impact of coronavirus on demand with the outbreak of SARS that occurred in 2003, also in China, not quite right. “China’s role for the oil market since then greatly changed, as it became a Central point for supply chains,” write the experts of the Agency. In 2003, the demand for oil in China was estimated at 5.7 million barrels per day, whereas in 2019, it increased to 13.7 million barrels per day (14% of total world consumption). Moreover, China accounted for two-thirds of all growth in global demand in 2019, and conclude the IEA.

Before the advent of the epidemic, the oil market should come into balance during the second half of 2020 under increasing reduction in OPEC production+.