NEW YORK (Oil Price) - The IEA slashed its demand forecast for the first quarter of 2020, predicting that global oil consumption will contract for the first time in over a decade.
In its first publication on the oil market since the outbreak began, the International Energy Agency (IEA) dramatically revised its oil demand forecast, predicting consumption will actually contract by 435,000 bpd, the first outright decline year-on-year since the global financial crisis more than a decade ago. Previously, the agency expected consumption to increase by 800,000 bpd from a year earlier.
For the full-year in 2020, the IEA cut demand growth by 365,000 bpd to just 825,000 bpd. That would be the lowest annual increase since 2011, and slightly below the growth figures for 2019, which itself was a down year.
The coronavirus continues to ravage China. Beijing released revised data, and the new number of infected cases is vastly higher than previously reported, raising questions about the severity of the crisis.
The number of cases jumped 45 percent after the data revision to nearly 50,000, which increased the global total by a third to 60,000. Those numbers could still be an undercount. Still, the number of new cases on a per-day basis seems to have peaked earlier this month, offering hope that the outbreak is slowing.
Even still, the effects on the oil market are deep. China accounted for about three-quarters of oil demand growth last year, so the crisis has struck a blow to total global consumption.