Global epidemic rebounds, oil demand will be reduced by 2.5 million barrels/day

According to Norway’s Rystad, under the influence of the second wave of outbreaks, the global daily oil demand may be reduced by 2.5 million barrels this year.

Restad pointed out that in several countries, including the United States, the second wave of the epidemic has become "more and more obvious." Rystad modeled the impact of the broader second wave of outbreaks on global oil demand. The results show that the global daily oil demand may fall from the current basic estimate of 89 million barrels to 86.5 million barrels.

Although Rystad does not expect the impact of the second wave of Covid-19 on global oil demand to be as strong as the first wave, because restrictive measures are limited to specific regions and industries, Rystad still warns that the impact of demand in peak months may be In the second wave of epidemics, it reached 18 million barrels per day. Rystad emphasized that the first month of negative demand growth caused by the first wave of Covid-19 outbreak was in April, when demand growth for the month was -26 million barrels per day.

Rystad said that if the second wave of outbreaks affect demand becomes a reality, the recovery of global oil demand next year will be much slower. According to Rystad's current basic plan, Rystad expects that the global monthly oil demand will be reduced by 4 million to 5 million barrels per day, and will further prolong the impact of the new coronavirus pandemic on the market in due course.

Rystad pointed out that no matter what degree of unexpected decline in demand, it will "lead to a sharp drop in oil prices." Rystad added that if there is a second wave of pandemic in the world, the market's "headache" will worsen severely.

Rystad said in a company statement sent to the American drilling website: "Until a large number of crude oil inventories have been offset in recent months, oil prices cannot rise sharply."

Rystad added that this means that as long as supply and demand run on opposite tracks, that is, supply rises and demand falls, oil prices will continue to present considerable downside risks. The second wave of the epidemic will extend the storage time of these products and send a signal of withdrawal to the refinery.