Oil Demand Growth to Quintuple Next Year
Global oil demand growth will drop to 0.44 million barrels per day (MMbpd) this year but rebound to 2.34 MMbpd in 2021.
That’s according to a new research note from Standard Chartered, which outlined that the company’s latest modelling shows a reduction of 2020 demand growth of 793,000 barrels per day relative to its pre-coronavirus base case.
The note highlights that growth of 0.44 MMbpd would be the slowest annual growth since 2009. Demand growth of 2.34 MMbpd would be the second strongest annual growth in the past 15 years, Standard Chartered noted.
“We see the demand shock as temporary; there is no demand destruction, simply a short-term dampening,” Standard Chartered analysts stated in the research note.
“We expect demand to return to its previous trend in 2021,” the analysts added.
Standard Chartered lowered its 2020 Brent forecast by $6 per barrel in its latest research note to $64 per barrel. The company’s average 2020 WTI forecast was lowered by $5 per barrel to $59 per barrel.
Following the coronavirus outbreak, Fitch Solutions Macro Research (FSMR) also revised down its Brent oil price forecast for 2020. FSMR now sees Brent averaging $62 per barrel this year, which marks a $3 drop compared to its previous forecast in January.
Rystad Energy revealed last week that it had slashed its global oil demand growth forecast for 2020 by 25 percent after assessing the impact of the coronavirus. The company now sees demand growing by 820,000 barrels per day (bpd) this year, compared to its previous forecast of 1.1. million bpd, which was published in December before the virus outbreak.
Rystad has warned, however, that the virus’ impact on demand could be even bigger and revealed that its worst-case scenario sees growth plunging to 650,000 bpd year on year.
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