The U.S.' Energy Information Administration (EIA) has revised down its global liquid fuels demand growth estimate because of the coronavirus epidemic that emerged in China and spread to the world.
The EIA said Tuesday in a statement that it estimates global liquid fuels demand will average 101.7 million barrels per day (bpd) in 2020, which is 378,000 bpd less than its previous forecast in January.
"The change in the forecast is driven by a combination of lower-than-expected heating fuel consumption caused by the Northern Hemisphere’s warmer-than-expected winter, an expected slowing of economic growth in general, and the particular economic effects of the 2019 novel coronavirus (COVID-19) outbreak," the statement said.
The EIA said it estimates COVID-19 will reduce China’s total petroleum and liquid fuels demand by an average of 190,000 bpd in 2020 due to three factors:-
First, the reduction in demand for petroleum and liquid fuels is expected to come with the decline in Chinese economic activity.
Second, flight cancellations in China will reduce jet fuel consumption.
And third, there will be an additional impact on China’s oil demand for other transportation fuels.
"EIA assumes that the timing of COVID-19’s impact on petroleum demand will follow a similar path as the 2003 SARS coronavirus outbreak: demand reductions will intensify in February, peak in March, and steadily decline during April, May, and June. GDP-induced impacts will linger through December," the statement read.
By Ovunc Kutlu