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.
