IEA forecasts huge drop in oil demand in 2020

#GS3 #Environment 

Market declines too big to offset with output cuts, it warns

  • The International Energy Agency (IEA) forecast a 29 million barrel per day (bpd) dive in April oil demand to levels not seen in 25 years and warned no output cut by producers could fully offset the near-term falls facing the market.
  • Benchmark Brent crude futures fell following the IEA’s monthly report, by $1.88, or 6.4%, to $27.72 a barrel by 1816 hours IST.
  • The IEA forecast a 9.3 million bpd drop in demand for 2020 despite what it called a “solid start” by producers following a record deal to curb supply in response to the coronavirus pandemic.
  • The Organization of the Petroleum Exporting Countries and other producers including Russia agreed to a record cut in output from May of 9.7 million bpd, or almost 10% of global supply, to help support prices.

Aramco eases options

  • Separately, Saudi Aramco has offered refineries in Asia and Europe the option to defer payments for crude cargo deliveries by up to 90 days, as plants struggle with shrinking demand.
  • The credit terms, offered through unnamed Saudi banks, are also seen as part of the country’s efforts to raise market share.
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