According to the estimates of the International Energy Agency (UEA), a difficult process awaits the oil market in the coming months. Explaining that there will be a historical decrease in demand for oil, UEA warns both manufacturers and consumers.
Awaiting Historical Decline
The oil market has been heavily damaged in recent weeks due to a dispute between Russia and Saudi Arabia. OPEC + resolved the dispute between these two countries last week and decided to reduce oil production. However, according to the estimations of the International Energy Agency, a different problem is waiting for the oil market.
Along with the coronavirus, oil consumption worldwide has drastically decreased. Even oil production has decreased so much that oil producers don’t know where to store their barrels.
According to the statements made by the UEA, there will be a historical decrease in oil consumption in the coming period. Demand for oil has increased steadily over the past 10 years. The decline in demand for oil this year means that the 10-year increase will come to an end. The statement made by the UEA is as follows:
“Even if countries mitigate their travel restrictions in the second half of the year, we expect a drop of 9.1 million barrels in daily oil demand compared to the numbers in 2019.”
Attention for April
According to the International Energy Agency, oil consumption will be much lower this year compared to 2019. During this period, the demand for oil is expected to decrease, especially in April.
According to the statements made by the UEA, daily oil consumption in April will be 29 million barrels less per day than in 2019. If we look at the data in the past, we can say that the demand for oil was so low in 1995.
The UEA expects the demand for oil to increase gradually in the coming months, but this increase may not be sufficient for oil producers. Because even in December, almost 3 million barrels less oil is expected to be consumed per day compared to the previous year.