Dubai — Oil demand may drop by "hundreds of thousands" of barrels per day from lockdowns called in recent days in Western Europe including Germany, France and England, Vitol's Asia head Mike Muller said Nov. 1.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
"I do think the impact in Western Europe is going to be hundreds of thousands of barrels a day but we need to decide how many hundreds of thousands," Muller told a Gulf Intelligence webinar.
As for crude prices on Nov. 2, following the weekend announcement of England's lockdown, he said: "We're not going to see a violent reaction downwards in price on Monday because I think the market could see this coming Wednesday, Thursday, Friday already."
Oil analysts are rethinking demand estimates with a view toward live traffic data and mobility restrictions because of the new lockdowns, Muller said.
"The dust hasn't settled on that because people are throwing all sorts of numbers around," he said.
One estimate that demand could fall by 1.7 million b/d in Germany and France alone is "completely overblown," he added.
England will go into lockdown on Nov. 5, except for schools and construction, and remain in place until Dec. 2, UK Prime Minister Boris Johnson said Oct. 31.
France, Germany and Belgium have also imposed travel restrictions in an attempt to curb a second COVID-19 wave.
Many nations had imposed lockdowns in the first COVID-19 wave, which sent Dated Brent to as low as $13.24/b in April. As a result, the 23-country OPEC+ alliance agreed to rein in nearly 10% of global crude supply, a critical step in clawing back oil prices.
S&P Global Platts assessed Dated Brent at $36.205/b on Oct. 30, down from a nearly 6-month peak of $45.985 on Aug. 25.