IEA Sees First Global Oil Demand Drop in a Decade on Coronavirus
OILPRICE-Started by Tom Kirkman , February 13 2020
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Posted 17 hours ago
Regardless of however serious you may think the Coronavirus may or may not be, it *is* affecting oil prices seriously.
Significantly, the IEA is alarmed at the drop in demand, and OPEC+ seems helpless again. Meanwhile, U.S. fracking continues unabated, continuing its balls to the wall overproduction, seriously shooting itself and the global oil industry in the foot yet again. Yes, I'm annoyed.
(Bloomberg) — Global oil demand will drop this quarter for the first time in over a decade as the coronavirus batters China’s economy, the International Energy Agency said.
The new estimates show that oil markets face a significant surplus despite the latest production cuts by OPEC and its partners. Crude already sank to a one-year low below $50 a barrel last week and the impact of the epidemic will be felt throughout the year, the agency said.
“Demand has been hit hard by the novel coronavirus and the widespread shutdown of China’s economy,” the Paris-based IEA said. “The crisis is ongoing and at this stage it is hard to be precise about the impact.”
World fuel consumption — which had previously been expected to grow by 800,000 barrels a day during the three-month period, compared with a year earlier — will instead contract by 435,000 a day, the IEA said in its monthly oil market report.