Oil demand to contract by 8m barrels a day in 2020
The International Energy Agency (IEA) today warned that global demand for the fuel would drop 8.1m barrels per day in 2020 due to the coronavirus pandemic.
According to the IEA’s monthly oil market report, demand is now set to fall to 91.9m barrels per day over the course of the year.
The slump in demand for jet fuel as a result of the widespread travel bans imposed due to the virus is the main reason for the drop, the IEA said.
In April, the number of miles flown by airlines decreased 80 per cent, and was still down 67 per cent in July.
Due to the uncertainty over when flying will return en masse, the IEA said that demand for jet fuel would fall 39 per cent next year.
The new forecast represents a 140,000 barrel per day decrease on the Paris-based organisations previous estimates for fuel demand.
The data also showed that production increased in July, with supply rising by 2.5m barrels per day to 90m barrels per day in July after Saudi Arabia ended its voluntary 1m barrels per day.
Oil cartel Opec will also ease record production cuts this month, which will increase the amount of oil on the market.
The lifting of the curbs comes as demand slowly begins to pick up with lockdown restrictions are relaxed around the world.
Some, however, are worried that the relaxing of the cuts comes just as a second wave of infections threatens to sweep across the world, potentially sending economies back into hibernation.
In line with the fall in demand, the IEA estimates that supply will drop 7.1m barrels per day across the year as a whole.