On Monday, April 27, 2020, railway wagons for oil, fuel and liquefied gas were standing on the siding of Yanichkino Railway Station near Gazprom Neft PJSC Moscow Refinery.
Andrei Rudakov | Bloomberg | Getty Images
The International Energy Agency (IEA) on Thursday lowered its forecast for global oil demand in 2020 and said it does not expect the outlook for the coronavirus vaccine to significantly boost demand until next year.
The International Energy Agency stated in its latest monthly report that has attracted much attention that it now expects world oil demand to shrink by 8.8 million barrels per day this year. Compared with last month’s assessed price, it is lowered by 400,000 barrels.
The Paris-based energy agency lowered its near-term outlook based on weak historical data and the resurrection of Covid-1
According to IEA, by 2021, world oil demand growth will increase by 5.8 million barrels per day, an increase of 300,000 barrels from the previous month.
Since Pfizer and BioNTech said on Monday that early results showed that their vaccine candidates are more than 90% effective in preventing Covid infection, oil prices have risen for three consecutive trading days.
It is hoped that safe and effective vaccines will end the coronavirus pandemic, which has claimed 1.28 million lives worldwide.
Before the launch of the Covid-19 vaccine, there are still huge challenges, but the oil market cheered the news, hoping that it may lead to increased energy demand in the coming months.
IEA said: “However, it is too early to know how and when the vaccine will return to normal life. For now, our forecast is not expected to have a significant impact in the first half of 2021.”
The international benchmark Brent crude oil futures traded at US$43.66 per barrel on Thursday morning, a decrease of approximately 0.3%, while the US West Texas Intermediate crude oil futures traded at US$41.33 per barrel, a decrease of approximately 0.35%.
OPEC + Conference
The latest report from the IEA is that not long ago, the energy alliance composed of some of the world’s most powerful crude oil producers will meet to discuss the next phase of oil production policy.
OPEC and non-OPEC allies (collectively referred to as OPEC+) plan to hold talks on December 1.
Faced with the continued downturn in global oil demand, the organization has agreed to reduce a record supply of 9.7 million barrels per day starting May 1. Subsequently, the supply was reduced to 7.7 million barrels in August, and OPEC+ said it plans to further reduce it next year.
The IEA said: “Given that the Covid-19 vaccine is unlikely to save the global oil market for a period of time, weak demand and increased oil supply have combined to provide a difficult background for the OPEC+ member state meeting.”
“Unless the fundamentals change, the task of rebalancing the market will progress slowly.”
On Wednesday, OPEC lowered its forecasts for the rest of the year and global oil demand in 2021, citing the weaker economic outlook and the surge in coronavirus cases.
The 13-member producer group said that by 2020, world oil demand is expected to shrink by 9.8 million barrels per day year-on-year, and then increase by 6.2 million barrels per year next year.