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IEA sees oil market stuck between no major slowdown but stalled recovery
LONDON: The global economy is likely to be not headed for any major slowdown due to COVID-19 but piled-up storage and anxiety over China’s oil need cloud oil markets’ recovery, an official with International Electricity Agency (IEA) said.
Keisuke Sadamori, IEA director with regard to energy markets and safety, told Reuters the view for oil was in this midst of either a subsequent wave or a steady initially wave of the coronavirus.
“There is an enormous amount of anxiety, but we don’t anticipate any additional serious slowdown inside coming months.”
“Even though (the market is) not expecting real strong growth coming back soon, the view outside the window on demand is more firm compared with three months ago,” he said in an employment interview.
Crude prices plunged inside spring to historic levels as the pandemic’s lockdowns depressed demand, and have pared loss but remained stuck close to $40 a barrel.
The IEA cut its 2020 oil demand forecast inside the monthly report on August. 13, warning that lowered air travel would lower international oil demand by almost eight.1 million barrels every day (bpd).
The Paris-based company downgraded its outlook at last in three months, as the plague continues to wreak economic discomfort and job losses throughout the world.
With Brent crude enrolling its first weekly great loss since June on Comes to an end, markets have grown increasingly worried over demand, poor improving margins and slow monetary growth, reducing incentives for you to draw crude and items from abundant stocks.
“It doesn’t seem like a massive commodity draw seems to be happening still,” Sadamori said.
“We are not seeing a robust pick up in refining activity, together with jet fuel is the real issue,” he added.
China, the world’s largest unsavory importer, emerged from an monetary lockdown sooner than other major economies and used the financial muscle to make document oil imports in recent months, an unusual bright spot amid international demand destruction.
But geopolitical tensions could call straight into doubt “to what magnitude it can be sustainable and continue long”, Sadamori said.
“There are so many uncertainties with regard to this Chinese economy and their partnership with key industrialized locations, with the U.S. and the days, even Europe. A possibility such an optimistic situation – that casts some hour over the growth outlook”.