Global oil demand could fall by 2.5M barrels per day as coronavirus cases surge - Houston Chronicle

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Global oil demand could fall by 2.5 million barrels per day as coronavirus cases surge in several countries, including the U.S., according to a new report.

If coronavirus-stricken regions impose new restrictions on business and travel, global oil demand could fall to 86.6 million barrels per day, down from the current 89 million barrels per day, a report from Rystad Energy said. The Norwegian energy research firm doesn’t expect global demand to drop as much as it did in April, when widespread lockdowns plunged oil demand to 73.7 million barrels per day, down from about 100 million barrels before the pandemic hit.

SECOND WAVE: Oil industry braces for possible double dip in prices as virus cases spike

If coronavirus cases continue to rise, global oil demand will recover more slowly in 2021 than previously expected. A so-called second wave and subsequent drop in oil demand would keep the glut of crude in storage, force refineries to pull back and send oil prices downward, Rystad said.

North America, particularly, the U.S., likely will be hit hardest by the rising coronavirus cases, Rystad added. Work from home policies and travel restrictions will further constrict demand for jet fuel and gasoline.

“The rise of Covid-19 cases in the US is of particular concern for the oil market given the country’s high oil consumption under normal circumstances, as this second wave could paralyze road fuel demand,” Rystad said.

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Global oil demand could fall by 2.5M barrels per day as coronavirus cases surge - Houston Chronicle
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