{"id":408069,"date":"2020-06-16T11:54:49","date_gmt":"2020-06-16T09:54:49","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=408069"},"modified":"2020-06-16T11:54:49","modified_gmt":"2020-06-16T09:54:49","slug":"oil-demand-recovery-may-take-a-couple-of-years-energy-agency-says","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/energy\/408069\/oil-demand-recovery-may-take-a-couple-of-years-energy-agency-says\/","title":{"rendered":"Oil demand recovery may take a couple of years, energy agency says"},"content":{"rendered":"

Global oil demand will rebound next year as the world emerges from the coronavirus pandemic, but recovering to pre-crisis levels may take a couple of years, the International Energy Agency said.<\/p>\n

Fuel use around the world will remain 2.5% lower next year than in 2019, largely because of the \u201cthe dire situation of the aviation sector,\u201d the Paris-based agency said in its first detailed assessment of 2021.<\/p>\n

The projections add to a fragile outlook for the oil industry, coming a day after BP Plc wrote off billions in assets on concern over long-term demand. Still, the report contains some good news for producers.<\/p>\n

The first half of this year is \u201cending on a more optimistic note\u201d because demand losses during lockdowns to curb the spread of coronavirus weren\u2019t as severe as expected, it said.<\/p>\n

Output cuts by OPEC+ and shutdowns in the US should put the market into deficit in 2021, depleting the massive 1.5 billion-barrel surge in inventories seen so far this year.<\/p>\n

Falling Short<\/strong><\/p>\n

\"\"<\/a><\/p>\n

Oil prices were trading above $40 a barrel in London on Tuesday, double the levels seen in late April, as economic activity resumes and the Organization of Petroleum Exporting Countries and its allies slash supply.<\/p>\n

The IEA – which advises most major economies on energy policy — bolstered its demand estimate for the second quarter by 2.1 million barrels a day, tempering some of the massive drop.<\/p>\n

Lifestyle changes such as working remotely won\u2019t trigger a long-term leveling off in fuel use, said Fatih Birol, the agency\u2019s executive director.<\/p>\n

Nonetheless, world crude consumption is still on course for a record contraction of 8.1 million barrels a day this year.<\/p>\n

While it will climb by 5.7 million barrels a day next year, the average of 97.4 million a day will remain 2.4 million barrels a day below 2019 levels.<\/p>\n

Demand may not return to 100 million barrels a day until 2023, Neil Atkinson, the IEA\u2019s head of oil markets and industry, said in a webinar after the release of the report.<\/p>\n

For now at least, the physical oil market is tightening.<\/p>\n

Stockpiles are on track to diminish rapidly over the next six months, and — in theory – decrease during each quarter of 2021, according to the agency\u2019s forecasts.<\/p>\n

OPEC+ made a \u201cstrong start\u201d to its latest round of output curbs last month, delivering 89% of its pledge to cut 9.7 million barrels a day, the IEA said.<\/p>\n

Earlier this month, the alliance agreed to press on with the strategy, and members that haven\u2019t yet implemented their share vowed to make up for it.<\/p>\n

Next year, global demand is on track to exceed supply, with the projected recovery in oil production to be less than a third of the increase in fuel use, at 1.7 million barrels a day.<\/p>\n

That could change however, if the OPEC+ coalition is tempted to revive output as consumption rebounds or if rising prices reinvigorate American shale drillers, the IEA cautioned.<\/p>\n

\u201cThe market may present producers with an opportunity to ramp up more quickly than dictated by current OPEC+ policy, or U.S. and other non-OPEC production could recover more strongly than forecast,\u201d it said.<\/p>\n

\n

Read: Here is the expected petrol price for July<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Global oil demand will rebound next year as the world emerges from the coronavirus pandemic, but recovering to pre-crisis levels may take a couple of years, the International Energy Agency said.<\/p>\n","protected":false},"author":59,"featured_media":274449,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9874],"tags":[],"class_list":["post-408069","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/408069","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=408069"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/408069\/revisions"}],"predecessor-version":[{"id":408073,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/408069\/revisions\/408073"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/274449"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=408069"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=408069"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=408069"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}