Oil: world demand minus 1.4 million barrels per day. Could it be true?
Global oil demand will drop 1.4 million barrels per day, according to Rystad Energy's latest forecast on Friday quoted by the National .
The loss of 1.4 million barrels per day would drop oil demand to 99.6 million barrels per day on average, below 2019 levels of 100.2 million barrels per day. And a rebound of that demand shouldn't take place next year at the latest, Rystead said.
The drop in oil demand will likely result, according to the analyst, from the Russian invasion of Ukraine, rising inflation, China's Covid-inspired freezes and supply chain disruptions. And even more pressure on oil demand could be applied through future blockades or geopolitical issues.
"The contraction in demand is a direct result of the impact of lower economic activity globally," the consultancy said, adding that such a decrease in demand could ease today's tight oil markets, calming oil prices. .
Rystad is not alone in reducing oil demand forecasts. OPEC cut its oil demand growth forecast for 2022 by 480,000 barrels per day in the wake of lower global economic growth forecast given the war in Ukraine and China's covid blockades.
The IEA also cut its oil demand forecast by 260,000 barrels per day to reflect the return of severe covid blockades in China.
Meanwhile, the World Bank and the IMF have both reduced their global global growth expectations for this year.
However, the exogenous factors in the fall in oil demand are not the important ones: just to understand, the lockdown in China and the drop in consumption in Russia and Ukraine are temporary factors. What is important is the destruction of demand linked to rising prices, which does not affect specific areas, but the whole world. Fuel demand tends to be rigid, but NOT insensitive to price, as this case is amply demonstrating. At absurd prices, people consume less.
Thanks to our Telegram channel you can stay updated on the publication of new articles of Economic Scenarios.
The article Oil: world demand minus 1.4 million barrels per day. Could it be true? comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/petrolio-domanda-mondiale-meno14-milioni-di-barili-al-giorno-sara-vero/ on Sat, 23 Apr 2022 16:48:34 +0000.