Virus spread to contract oil demand
Global oil demand is set to contract in 2020 for the first time in more than a decade as global economic activity stalls due to the coronavirus.
The downward revision by the International Energy Agency came as oil prices dropped as much as third in their biggest one-day fall since the 1991 Gulf War, after Saudi Arabia launched a bid for market share following the collapse of an output pact with Russia.
The energy watchdog said it expected oil demand to be 99.9 million barrels per day (bpd) in 2020, lowering its annual forecast by almost 1 million bpd and signalling a contraction of 90,000 bpd, the first time demand will have fallen since 2009.
Global oil demand fell 2.5 million bpd on the year in the first quarter, or around 2.5 per cent, the IEA estimated in its report, as coronavirus cut travel and economic activity.
Around 1.8 million bpd of that was in China.
The Paris-based IEA said in its medium-term outlook report that in an extreme scenario where governments fail to contain the spread of the coronavirus, which has affected over 100,000 people, consumption could drop by up to 730,000 bpd.
The virus has led to a sharp drop in industrial activity particularly in China and other Asian economies, as well as Italy, one of the worst-affected places outside China. The virus has led to a slowdown in demand for ground and air transport.
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