The International Energy Agency’s (IEA) latest report on oil markets gives insight into how the agency expects global demand for petrol to respond in coming months as countries begin to relax efforts to contain the coronavirus disease 2019 (COVID-19).

In the report, the agency makes its projections on the assumption that the virus will likely be largely contained at a global level by June or July, even as the economic impact of the social distancing measures imposed to fight the virus continue to be felt.

The report notes that in January, global petrol demand had increased by a modest 50,000 b/d from the same time in 2019. But in February, as China and other countries began to respond to the coronavirus outbreak, “the picture reversed dramatically,” IEA said.

Global petrol deliveries fell by 1.4 million b/d during the month, and then to 3.7 million b/d in March, as more countries implemented stay-at-home rules.

IEA estimates that petrol demand will fall by 11.2 million b/d year over year in April, which the agency says is the largest monthly decrease ever recorded.

The agency projects that in May, demand will be off 10 million b/d year over year.

The report goes into some detail about how this scenario will play out in petrol demand levels in several major industrial nations.

For example, in the United States, IEA says demand fell by 10% compared to normal levels in March, 45% in April and projects a decline of 40% in May. The agency projects demand will be 20% off normal levels in June, indicating much of the nation returning to normal activities. OPIS data collected from about 15,000 retailers in the United States shows national demand approaching closer to 50% for April.

In France, Germany and the United Kingdom, IEA said demand was at normal levels in January and February, was 35% off normal levels in March, 70% in April, 60% in May and will still be 35% off normal in June.

   In India, petrol demand fell 10% off normal levels in March and 55% in April. IEA expects demand to start to recover in May, when it will be 40% off normal levels and in June be 5% below normal.

South Korean will see one of the smallest impacts on petrol demand, with demand 15% off normal levels in March, 20% in April before starting to recover and being 10% off normal levels in May and returning to normal in June, IEA said.

Australia was not singled out in IEA’s specific country forecasts but Australia seems to be on a faster track to recover than other countries which might mean their petrol demand pattern looks more like Korea than the U.S.

Brazil will also be spared massive demand destruction, IEA forecasts, with demand 20% off normal in March and April, 40% in May and recovering to only 5% below normal in June, according to IEA.

In Japan, demand fell to 10% below normal in February and March, 30% below normal in April and likely into May and then is expected to be 20% below normal in June.

China will have the longest period of demand destruction in the IEA comparison, but it will not see the large drop offs seen in some other countries, IEA projects. The agency says demand was off by 5% in January, 40% at the height of the country’s outbreak in February, 30% in March, 15% in April and is expected to lag by 5% in May and June.

IEA said it expects global petrol demand to be off by about 590,000 b/d in the second half of 2020, due to economic problems caused by COVID-19 and bans on large events as well as continued containment measures in some countries.

The agency said it expects overall petrol demand for 2020 to decline by 2.9 million b/d, or 11%.

Provided by OPIS (