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The demand of oil crashed due to restrictions from coronavirus. Photo: Rob Carr/Getty Images

The International Energy Agency sees oil demand surging by an unprecedented 5.7 million barrels per day next year, but even that would leave it 2.4 million below 2019 levels.

Why it matters: This morning's report is the first time that IEA's closely watched, detailed monthly market analysis has looked ahead to 2021.

  • IEA sees a major return to activity (which is already underway), but also expects the collapse in air travel will drag on oil demand until 2022 — or even well beyond.
  • The sharply lower demand projected in 2021 compared to the pre-COVID era of 2019 is "largely explained by the dire situation of the aviation sector," IEA notes, citing industry estimates that passenger traffic will still be down about 55%.

The big picture: IEA also now sees global demand down 8.1 million barrels per day this year compared to 2019, which is an unprecedented collapse but not quite as steep as they had once projected.

  • "While the oil market remains fragile, the recent modest recovery in prices suggests that the first half of 2020 is ending on a more optimistic note," IEA said.
  • "If recent trends in production are maintained and demand does recover, the market will be on a more stable footing by the end of the second half," they said, citing production cuts by OPEC+ and other nations.

Worth noting: Take these recovery estimates with a grain of salt. Or chunks of salt. "[W]e should not underestimate the enormous uncertainties," IEA said.

Go deeper

Amy Harder, author of Generate
Aug 6, 2020 - Energy & Environment

Coronavirus hastens Big Oil's Atlantic divide on climate change

Illustration: Aïda Amer/Axios

The pandemic is accelerating a divide between European and American oil companies over climate change and clean energy.

Why it matters: Bottom lines and investor returns will be vastly different across the corporate spectrum depending on how aggressively the world tackles climate change in the coming decades.

Ben Geman, author of Generate
33 mins ago - Energy & Environment

Higher education expands its climate push

Illustration: Aïda Amer/Axios

New or expanded climate initiatives are popping up at several universities, a sign of the topic's rising prominence and recognition of the threats and opportunities it creates.

Why it matters: Climate and clean energy initiatives at colleges and universities are nothing new, but it shows expanded an campus focus as the effects of climate change are becoming increasingly apparent, and the world is nowhere near the steep emissions cuts that scientists say are needed to hold future warming in check.

Ina Fried, author of Login
59 mins ago - Economy & Business

The pandemic isn't slowing tech

Illustration: Eniola Odetunde/Axios

Thursday's deluge of Big Tech earnings reports showed one thing pretty clearly: COVID-19 may be bad in all sorts of ways, but it's not slowing down the largest tech companies. If anything, it's helping some companies, like Amazon and Apple.

Yes, but: With the pandemic once again worsening in the U.S. and Europe, it's not clear how long the tech industry's winning streak can last.

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