IEA continues to lower 2020 demand forecast

Oil

The International Energy Agency (IEA) has revised its global oil demand forecast for 2020 down by 200K b/d to 91.7M b/d compared to its last report, citing renewed concerns surrounding the coronavirus pandemic as we move into the northern hemisphere winter, and stating that most of the ‘easy gains’ in recovering demand have already been achieved. This would mean a decline of 8.4M b/d y-o-y compared to 2019, with the demand forecast for 2021 remaining in line with August’s report at 97.1M b/d, an increase of 5.4M b/d y-o-y.

Global refinery runs are expected to decline by 7.3M b/d y-o-y to average 74.4M b/d in 2020, before recovering by 5.1M b/d y-o-y to 79.5M b/d in 2021. Increased refining earlier in the year, as crude oil prices tumbled and raised refinery margins, has resulted in an overhang of oil product stocks. It could take another two to three months of large draws to absorb the excess stocks from April/May.