IEA: Recovery in Oil Demand Set to Slow for The Rest of 2020

The International Energy Agency reduced its forecast for oil demand this year, indicating caution about the pace of the economic recovery from the Corona pandemic.

The Paris-based agency lowered its forecast for 2020 by 200,000 bpd to 91.7 million bpd, the second cut of its oil demand forecast in several months.

The agency said the renewed rise in COVID-19 cases, associated general isolation measures, continued remote work and a weak aviation sector were hurting demand.

The agency currently expects an implicit withdrawal from stocks in the second half of the year at about 3.4 million barrels per day, which is about one million barrels per day less than it expected last month, with stock levels in July in developed countries reaching record high levels again.

Keisuke Sadamori, IEA director for energy markets and security, told Reuters the outlook for oil was in the midst of either a second wave or a steady first wave of the coronavirus.

“There is an enormous amount of uncertainty, but we don’t expect any additional serious slowdown in the coming months.”

“Even though (the market is) not expecting real robust growth coming back soon, the view on demand is more stable compared with three months ago,” he said in an interview.