Al-Jasser: work is underway to restructure and develop aviation infrastructure    Diriyah to host third IMFC Deputies meeting under Saudi chairmanship    15,135 decisions taken to penalize Saudis and expats for violations    Saudi-European Parliamentary Friendship Committee discusses cooperation during Strasbourg visit    Saudi stock market loses half a trillion riyals, with Aramco's losses amounting to SR340 billion Tariff turmoil rattles Gulf markets    KAU to host Digital Communication Conference in Jeddah from April 29 to May 1    TGA: Riyadh tops with 45% of 290 million orders delivered in 2024    Aja and Salma mountains draw nature lovers to Hail's rugged landscapes    US revokes all visas for South Sudanese nationals over deportation dispute    Death toll from Myanmar earthquake rises to 3,471    Macron to hold Gaza summit with Egypt and Jordan in Cairo    Benzema rescues Al Ittihad with stoppage-time equalizer in thrilling Jeddah Derby    Al Qadsiah and Al Ettifaq share spoils in tense Eastern Derby stalemate    Moussa Diaby praises Al Ittihad's resilience after Jeddah Derby draw "When you can't win, you take a point"    Saudi assistant referee Iman Al Madani joins AFC elite list for 2025    Riyadh Art Week launches with over 50 galleries showcasing global artistic dialogue    Turki Al-Sheikh announces five new Saudi film projects to be produced in Riyadh    Saudi Ministry of Education to showcase innovations at 2025 Geneva International Exhibition    Ed Sheeran weaves Persian music into new song, Azizam    Veteran Bollywood actor Manoj Kumar dies at 87    Screen time in bed linked to insomnia, study finds    Bollywood actress vindicated over boyfriend's death after media hounding    Grand Mufti rules against posting prayers and preaching in mosques on social media    King Salman prays for peace and stability for Palestinians in Ramadan message King reaffirms Saudi Arabia's commitment to serving the Two Holy Mosques and pilgrims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



A mild second wave of COVID-19 is now base case scenario for oil demand
Published in The Saudi Gazette on 24 - 07 - 2020

As COVID-19 infections continue to increase around the world and the implications of the pandemic's spread are acknowledged in key markets in the Americas and Asia, Rystad Energy is now changing its base case scenario for oil demand, incorporating a mild second wave effect.
The updated base case scenario assumes a temporary pause in global demand recovery, as the reopening of Europe and other regions is offset by COVID-19 outbursts in populous and high oil-consuming countries in the Americas and Asia such as the United States, Brazil and India, among others.
There is downside risk to our base case. We have identified a category of oil demand at risk — that is, the maximum number of barrels that could be lost if a full lockdown is reinstated globally. In this worst-case scenario in which strict lockdown measures return, we expect demand to edge around 3.7 million bpd lower for the rest of 2020, compared to our updated base case scenario.
Even if the disease is not reigned in and this full-blown second wave manifests, the effect on oil demand will not be as destructive as during the first shock in April 2020. That is because the world is better prepared to introduce smarter and more targeted lockdowns, handle infections, and also because the global economy can simply not afford another steep economic meltdown.
In this update, instead of gradually recovering monthly, global oil demand in our base case is now expected to stay relatively flat from July to October 2020 and then inch up again from November, albeit at a much slower rate than previously estimated.
In July, oil demand is now expected to average 90.2 million barrels per day (bpd) and then improve to an average of 90.6 million bpd for August, September and October.
In November, oil demand is likely to reach 93 million bpd and in December climb a bit more to 94.7 million bpd – still a far cry compared to the pre-COVID oil demand average level of more than 99 million bpd in 2019.
The mild second wave is expected to last into January and February 2021. From March 2021 onwards, our updated base case scenario does not diverge from our previous base case that did not incorporate a second wave.
On an annualized level, the updated base case scenario shows global oil demand is now forecast to reach 89.7 million bpd in 2020 and 97.1 million bpd in 2021.
"We do not expect full demand recovery in 2021 as structural growth drivers are still not set to snap back. Furthermore, some fuels remain marginally depressed, with aviation activity not fully recovering before the end of 2022, when, in the best case, oil demand will approach pre-virus levels," said Rystad Energy's senior oil markets analyst Artyom Tchen.
The halt in demand recovery in our updated base case scenario is predominantly due to a slowdown in road fuel demand from August, which otherwise enjoyed a big boost in July.
While in June road diesel landed 2.57 million bpd lower than our pre-COVID-19 estimates, it picked up in July and will lag only by 1.56 million bpd. Similarly, road gasoline landed 2.61 million bpd lower than our pre-pandemic estimate in June and will only trail by 1.71 million bpd in July.
From next month though, our current base case shows that this demand gap against our pre-virus estimates will widen again.
The above gap for diesel will reach 1.63 million bpd in August, 1.73 million bpd in September and 1.82 million bpd in October, before shrinking to 1.49 million bpd in November and 1.34 million bpd in December this year.
For gasoline, the gap will reach 2.04 million bpd in August, 2.01 million bpd in September and 1.92 million bpd in October, before closing to 1.57 million bpd in November and 1.40 million bpd in December.
It is worth noting that jet fuel is not expected to follow a similar path, as airlines have implemented strict measures and are slowly but steadily restarting disrupted flight routes, providing some summer transport relief for healthy passengers.
The gap between the current demand estimate and our pre-COVID-19 projection for jet fuel reached 4.94 million bpd in June, will land at 4.77 million bpd in July and will be shrinking for every single month until the end of 2020, according to our updated scenario.
That said, jet fuel is the fuel currently most hit by the pandemic and, as mentioned earlier, it will take a much longer period to fully recover.
In the grim case of the full-blown second wave lasting from Aug-20 to Oct-20, there will be long-lasting demand impacts that carry into 2021 and beyond. — Rystad Energy


Clic here to read the story from its source.