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All Fuel Demand Drops Alarmingly

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As a result of recent developments, with travel restrictions, quarantine obligations and new government policies announced daily around the world, demand for all kinds of fuel are on a nosedive, says the 8th edition of the Rystad energy report..

Presented below are some of the forecasts.

Global oil demand:

In another consecutive revision of our weekly estimates, our newest forecast for oil demand now projects a decrease of 10.8% for 2020, or 10.7 million barrels per day (bpd) year-on-year. Our estimates show that total oil demand in 2019 was approximately 99.5 million bpd, which is now projected to decline to 88.8 million bpd in 2020. To put the number into context, last week we projected a decrease to 89.2 million bpd.

At the moment, we expect the month of April to take the biggest hit, with demand for oil estimated at 71.8 million bpd, a 27.1% drop. Similarly, May’s demand is expected to fall by 21.4% to 77.6 million bpd. June’s demand is forecast at 83.7 million bpd, down by 14.9%.

This downgrade takes into account developments that have occurred up to and including Tuesday, 28 April.

Road fuel demand:

We believe that total global demand for road fuels will fall by 11.2%, or by 5.3 million bpd year-on-year, a slight downgrade from last week’s report where road fuels were expected to decline by 10.5%.

Road fuel demand in 2019 is estimated to have been 47.4 million bpd. We now see it reaching only about 42.1 million bpd in 2020.

Most of this reduction will take place in April, which will see road fuel demand limited to just 31.7 million bpd globally, a 33% drop. May’s road fuel demand is now estimated at 36.6 million bpd, down by 22.8%. June’s road fuel demand is now forecast to reach 40 million bpd, down by 15.6%.

Jet fuel demand:

Among the various fuel sectors, we expect jet fuel to be hit the hardest. We expect global commercial air traffic will fall by at least 31% this year versus the levels seen in 2019, which we estimate stood at around 99,700 flights per day. This number will be revised as operators continue to cut routes.

Many distressed airlines are now facing heavy cost cuts and are laying off unprecedented numbers of employees as many non-essential routes are closed.

As a base case we now assume that the common summer air travel peak will not occur at all this year. We see global jet fuel demand falling by almost 33.6% year-on-year, or by at least 2.4 million bpd. Last year’s demand for jet fuel was about 7.2 million bpd.

Jet fuel demand in April will be as low as 2.1 million bpd, and it will shrink further to 1.9 million bpd in May.

Regional demand figures:

Total oil demand in the United States for 2020 is now forecast to fall by 2.2 million bpd to 18.3 million bpd, a 10.7% decline from 2019’s 20.5 million bpd. April will see a decline of 30.8%, with demand falling to 13.9 million bpd. May will see a decline of 24%, with demand falling to 15.4 million bpd. June’s demand is estimated to also decline by 16.8% to 17.1 million bpd.

US road fuel demand in 2020 will fall by 1.2 million bpd, a 10.7% decline to 10.0 million bpd from last year’s 11.2 million bpd. April will see a decline of 37%, with demand falling to 7.1 million bpd. May will see a decline of 24.5%, with demand falling to 8.6 million bpd. June’s road fuel demand will fall by 17% to 9.6 million bpd.

Total oil demand in Europe for 2020 is now forecast to fall by 1.7 million bpd to 12.5 million bpd, a 12.4% decline from 2019’s 14.2 million bpd. April will see a decline of 34%, with demand falling to 9.6 million bpd. May will see a decline of 26,5%, with demand falling to 10.3 million bpd. June’s demand will fall by 19.6% to 11.4 million bpd.

Europe’s road fuel demand in 2020 will fall by 0.7 million bpd, a 10% decline to 6.3 million bpd from last year’s 7.0 million bpd. April will see a decline of 34.7%, with demand falling to 4.6 million bpd. May will see a decline of 24.4%, with demand falling to 5.2 million bpd. June’s demand will decline by 16.5% to 5.9 million bpd.

Total oil demand in China for 2020 is now forecast to fall by 1.3 million bpd to 12.4 million bpd, a 9.5% decline from 2019’s 13.7 million bpd. April will see a decline of 4.9%, with demand falling to 12.4 million bpd. May will see a decline of 12.4%, with demand falling to 12.4 million bpd. June’s demand will fall to 13 million bpd, a 1.1% drop.

China’s road fuel demand in 2020 will fall by 0.4 million bpd, a 7.5% decline to 4.9 million bpd from last year’s 5.3 million bpd. April will see a decline of 6.6%, with demand falling to 4.7 million bpd. May will see a decline of 12.6%, with demand falling to 4.9 million bpd. June’s demand will fall by 2.2% to 5.1 million bpd.

Other report findings:

Aside from energy-related projections, the Covid-19 Report also includes general estimates regarding the spread and development of the pandemic globally, including forecasts regarding how the virus will evolve in the most affected countries.

Our numbers will be adjusted weekly for every new dramatic step taken by governments to slow the spread of Covid-19.

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