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COVID-19: Coronavirus impacts demand for oil

Oil Industry

IEA Study shows first quarterly contraction in oil demand for a decade.

Muriel Cozier

14 February 2020

The latest report from the International Energy Agency (IEA) backs up indications that Covid-19 (the novel coronavirus) has triggered an economic slowdown, with evidence of a worldwide falloff in demand for oil.

The IEA’s Oil Market Report February 2020 says that this is the first quarterly contraction in global oil demand in more than a decade. ‘We have cut our 2020 growth forecast by 365 000 barrels/day to 825 00 barrels/day, the lowest level since 2011. Lower than expected consumption in the OECD trimmed 2019 growth to 885 000 barrels/day,’ the IEA stated. The organisation added, ‘The coronavirus outbreak has also led us to revise down the outlook for global refinery runs.’

Highlighting the importance of China in terms of global oil consumption the IEA said that in 2003, China’s oil demand was 5.7 million barrels/day and by 2019 it had more than doubled to 13.7 million barrels/day (14% of the global total). Moreover, China accounted for more than three quarters of global oil demand growth during 2019. The consequences of Covid-19 for global oil demand ‘will be significant,’ the IEA states.

The IEA Oil Market Report is considered one of the world’s most authoritative and timely sources of data on the global oil market.

In the meantime, a survey conducted by market research company Ipsos and reported by the World Economic Forum indicates that there is widespread public support for quarantine and travel bans to contain the Covid-19 outbreak. Questioning 8001 adults from eight countries, aged between 16 and 74, researchers found ‘high levels of concern about the dangers posed by the respiratory virus.’

People living in Australia, Canada, France, Germany, Japan, Russia, United Kingdom and the United States were surveyed.  On average, 19% agreed that the coronavirus outbreak has been contained and will soon be over, more than twice as many, 46%, disagreed. People in the UK (55%), Canada (51%), Australia (50%) and Japan (49%) were most likely to disagree that the outbreak has been contained. One in three Russian respondents believe the coronavirus outbreak has been contained.

Ipsos said that the survey was conducted 7-9 February 2020 on the Global Advisor online platform. Ipsos added that the samples in all countries excluding Russia could be taken as representative of these countries’ general adult population under 75. ‘The sample in Russia is more urban, more educated and/or more affluent then the general population and should be viewed as reflecting the views of the “connected” segment of the population,’ Ipsos said. 

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