IEA cuts oil demand forecast as outlook for air travel deteriorates, WTI stays below $43

Dhwani Mehta FXStreet

In its latest oil market monthly report, the International Energy Agency (IEA) revised down its 2020 global oil demand forecast, in the face of deteriorating air travel outlook amid coronavirus crisis.

Additional takeaways

Global oil supply set to fall 7.1m bpd in 2020.

Global oil supply forecast to rise 1.6m bpd in 2021.

Oecd industry stocks rose by 16.2 mln barrels to 3.235 bln barrels in June, 286.7 mln barrels above five-year average.

2020 global refining throughput in q2 declined by 11.5 mln bpd y/y to the lowest quarterly level in 17 years.

Oil demand exceeded supply in June and there is an implied stock draw for the rest of the year.

Compensation for earlier OPEc+ over-production could keep world supply steady in August.

Global oil supply rose by 2.5 mln bpd in july to 90 mln bpd.

Upsurge in covid-19 cases has prompted downgrade of h2 demand estimate for gasoline.

It remains unclear if new covid-19 cases herald second wave or simply a regular fluctuation.

Data show aviation kilometres travelled nearly 80% down y/y in April and still down 67% y/y in July.

Revises down 2021 crude oil demand estimate by 240,000 bpd to 97.1 mln bpd.

Predicts decline of 2020 global oil demand of 8.1 million bpd, mostly due to poor jet fuel demand.

WTI stays flat below $43

Despite the downbeat oil demand outlook, WTI jumped back to test the daily highs of $42.90 reached in early Asia. The black gold remains below the $43 mark amid the cautious market mood.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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