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IEA cuts 2020 world oil demand forecast on virus surge

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The International Energy Agency (IEA) on Thursday lower its 2020 world oil demand forecast, citing a resurgence of the Covid-19 pandemic, with vaccines unlikely to have a lot of an impression till nicely into subsequent yr.

The IEA mentioned that because of contemporary restrictions imposed by governments in an effort to curb the illness, it anticipated full-year 2020 world oil demand to return in at 91.three million barrels per day (mbpd) — down by 8.Eight mbpd in contrast with the drop of 8.four mbpd given in final month’s common report.

The rebound subsequent yr will probably be barely higher, nonetheless, with a rise of 5.Eight mbpd, up from final month’s 5.5 mbpd.

“Vaccines are unlikely to significantly boost demand until well into next year,” the IEA cautioned.

It famous that experiences of progress within the seek for a vaccine had triggered “considerable excitement,” giving oil costs — and the monetary markets usually — a large increase.

“However, it is far too early to know how and when vaccines will allow normal life to resume. For now, our forecasts do not anticipate a significant impact in the first half of 2021,” it mentioned.

“In the here and now we continue to see surging caseloads, particularly in Europe and the United States,” it added.

The IEA, arrange by the developed economies after the oil value and provide shocks of the early 1970s, mentioned oil output rose barely to 91.2 mbpd in October as OPEC and main non-OPEC nations caught by a deal to chop manufacturing.

“Production from countries participating in the OPEC+ agreement held largely steady,” it famous.

On Wednesday, OPEC itself revised down its forecasts for world oil demand this yr and subsequent because of the financial disruption brought on by the coronavirus pandemic.

OPEC expects world demand for crude oil to say no by 9.Eight mbpd in 2020, in contrast with its earlier forecast for a drop of 9.5 mbpd.

For 2021, OPEC anticipated a rebound of 6.2 mbpd however this represented a lower of 300,000 bpd on its earlier estimate, leaving world demand at 96.three mbpd.

Under the phrases of the deal between OPEC and non-cartel producers, principally Russia agreed in April, the so-called OPEC+ group pledged to chop output by 9.7 mbpd from May 1 till the tip of June.

The cuts had been then to be steadily eased from July, to 7.7 mbpd by to December after which 5.Eight mbpd from January.

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