The International Energy Agency is lowering its forecast of oil demand citing the possibility countries will implement new lockdowns in response to the spread of the COVID-19’s Delta variant. Neil Hume reports in the Financial Times:
The International Energy Agency has “sharply” lowered its oil demand forecasts for the rest of the year after several major energy-consuming countries imposed fresh curbs to stop the spread of the Delta coronavirus variant.
In its monthly market report, the Paris-based organisation said growth would be 500,000 barrels per day lower in the second half of 2021 compared with its last estimate because of the “worsening progression of the pandemic”.
Global oil demand is now seen by the IEA as rising 5.3m b/d on average to 96.2m b/d in 2021, and by a further 3.2m b/d in 2022. Before the pandemic began it was almost 100m b/d.
“Growth for the second half of 2021 has been downgraded more sharply, as new Covid-19 restrictions imposed in several major oil-consuming countries, particularly in Asia, look set to reduce mobility and oil use,” the report stated.
“We now estimate that demand fell in July as the rapid spread of the Covid-19 Delta variant undermined deliveries in China, Indonesia and other parts of Asia.”
After surging by 3.8m b/d in June, the IEA said global oil demand “abruptly reversed course” in July, and fell by 120,000 b/d month on month.
Oil prices have dropped 6 per cent since the end of July on growing concerns about the Delta strain sapping demand in Asia, especially China, just as more supply hits the market. However, they are still up almost 40 per cent this year.
Read more here.