The International Energy Agency on Aug. 13 lowered its estimates for world oil demand this year and next, along with its estimate of the "call" on OPEC crude oil, due to a slower-than-expected recovery for mobility and aviation.
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Noting an "upsurge" in coronavirus cases and recent mobility data, the IEA said it had downgraded its road transport fuel demand estimates, particularly for gasoline, for the second half of this year, as it published its monthly oil market report.
It revised downward its oil demand estimate for this year by 140,000 b/d from last month's report, to 91.95 million b/d, a reduction from 2019 demand of 8.1 million b/d, and revised downward next year's demand estimate by 240,000 b/d to 97.1 million b/d.
"For road transport fuels, demand in the first half of 2020 was slightly stronger than anticipated, but for the second half we remain cautious and the upsurge in COVID-19 cases has seen us downgrade our estimates, mainly for gasoline... Jet fuel demand remains the major source of weakness," the IEA said, noting, however, that China shows signs of a strong demand recovery.
The revisions in turn prompted a reduction in its estimate of the "call" on OPEC crude of nearly 1 million b/d in the second half of the year, with the third-quarter call reduced by 1 million b/d to 27.2 million b/d and Q4's by 900,000 b/d to 29.5 million b/d.
The report also suggested a slow recovery for a refining sector facing high global stockpiles, with refinery runs in 2021 expected to be 2.7 million b/d lower than their historical annual peak in 2018.
"In July, crude runs are estimated at 3.7 million b/d above the low point in May, with another 5.6 million b/d ramp-up expected by end-2020. In 2020, runs will decline by 6.9 million b/d, but in 2021 they will rebound by only 4.5 million b/d," the IEA said.
"Ongoing uncertainty around demand caused by COVID-19 and the possibility of higher output means that the oil market's re-balancing remains delicate," the IEA said.