Aug 13, 2020 - Energy & Environment

IEA cuts oil demand forecast, citing "stalling" mobility

Illustration of oil pump pouring out an oil question mark
Illustration: Eniola Odetunde/Axios

The International Energy Agency has again lowered its projected global oil demand estimates, "reflecting the stalling of mobility as the number of COVID-19 cases remains high."

Why it matters: The agency's analysis Thursday is the first time in several months that IEA deepened its projection of the extent of the pandemic-driven demand collapse.

  • Its latest monthly report underscores how COVID-19 continues to weigh heavily on the oil sector despite some recovery in consumption and prices from the depths of the crisis.

By the numbers: IEA now sees demand at 91.9 million barrels per day (bpd) this year, down 8.1 million bpd from last year's levels, which is 140,000 bpd lower than its prior report.

  • The report also reduces expectations for the amount of recovery next year. IEA sees oil demand rebounding to 97.1 million bpd next year, which is also lower than its prior outlook.

What they're saying: "Jet fuel demand remains the major source of weakness," the Paris-based agency said.

  • "For road transport fuels, demand in the first half of 2020 was slightly stronger than anticipated, but for the second half we remain cautious and the upsurge in Covid-19 cases has seen us downgrade our estimates, mainly for gasoline," the report states.
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