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The coronavirus outbreak could hit global oil demand growth more than currently expected, the head of the International Energy Agency (IEA) said on Tuesday, adding that the agency could additionally trim its oil demand growth projections.
“We certainly see the lowest oil demand growth in the last 10 years and we may need to revise it ...downwards,” the IEA’s executive director Fatih Birol told Reuters at an energy conference in London today.
In a sign that the coronavirus outbreak is spreading to international events, the International Petroleum Week in London this week is being held regularly, but many participants have canceled receptions and events at the conference due to the outbreak. Major international oil traders and refiners have canceled networking events, sources told Reuters last week.
The comments from the head of the Paris-based agency come a day after oil prices plunged by more than 4 percent as the coronavirus spread outside Asia, threatening global economic growth and raising fears of additional loss of oil demand growth.
Earlier this month, the IEA said in its Oil Market Report (OMR) that the coronavirus outbreak would lead to the first quarterly contraction in global oil demand in more than 10 years. The IEA slashed its 2020 oil demand growth forecast by 365,000 bpd to just 825,000 bpd—which would be the lowest oil demand growth since 2011.
Now, according to the IEA’s Birol, even this lowered projection could be further revised downwards due to the coronavirus outbreak.
Earlier this month, OPEC also slashed its global oil demand growth forecast for 2020, expecting the coronavirus outbreak to weigh heavily on fuel demand in the world’s oil demand growth driver, China. OPEC slashed its oil demand growth estimate by 230,000 bpd from last month’s assessment and now sees global oil demand growth at just below 1 million bpd this year—at 990,000 bpd.
The EIA also cut its oil demand growth forecast by 378,000 bpd for this year due to coronavirus outbreak.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.