Oslo-based energy market intelligence firm Rystad Energy has slashed its global oil demand forecast for 2020 by a quarter, citing the impact of the novel coronavirus.
Rystad has pointed to the fact that the coronavirus epidemic in China has triggered restrictions in the country’s public transport and air travel, both at a domestic and international level, reducing demand for oil, which has lost about a fifth of its value since the start of the year.
Providing an update on its oil demand assessment on the back of the impact of the virus, Rystad Energy said it was heavily revising its annual global oil demand growth forecast down by 25% to 820,000 barrels per day (bpd) in 2020.
"Our previous growth forecast, published in December, before the coronavirus outbreak, stood at 1.1 million bpd. The coronavirus’ impact on demand growth could be even wider, however, slashing growth to as low as 650,000 bpd year on year (y/y) in our worst-case scenario," Rystad said.
Chinese oil demand accounted for 13% of the global total in 2019, standing at 13.6 million bpd. Before the coronavirus outbreak, Rystad expected Chinese demand to grow by 400,000 bpd this year, including a 100,000 bpd y/y growth in jet fuel demand.
"We have now reduced our forecast for Chinese demand growth to 230,000 bpd this year, and we expect the largest negative impact to be seen in demand for jet fuel. Rystad Energy’s data show that Chinese jet fuel demand fell by 30% in January and could potentially decline by 60% in February and March," Rystad said