COVID-19 demand update: Oil seen down 10.4%, jet fuel down 31%, road fuel down 10.5% in 2020

Source: press release, 23 April 2020

Global oil demand impact of COVID-19, total demand (up), losses (down) (source: Rystad Energy OilMarketCube)
Global oil demand impact of COVID-19, total demand (up), losses (down) (source: Rystad Energy OilMarketCube)

Rystad Energy’s weekly comprehensive COVID-19 report calculates the effect of the novel coronavirus in our lives and offers updated estimates for global fuel markets.

As a result of recent developments, with travel restrictions, quarantine obligations and new government policies announced daily around the world, Rystad Energy is making frequent updates to most of its estimates.

Below are some of Rystad Energy’s forecasts from the just-published seventh edition of the report. Note that some historical numbers may differ from week to week as governments revise their official figures.

Global oil demand:
In another consecutive revision of its weekly estimates, Rystad Energy’s newest forecast for oil demand now projects a decrease of 10.4% for 2020, or 10.3 million barrels per day (bpd) year-over-year. Estimates show that total oil demand in 2019 was approximately 99.5 million bpd, which is now projected to decline to 89.2 million bpd in 2020. To put the number into context, last week Rystad Energy projected a decrease to 90.3 million bpd.

At the moment, Rystad Energy expects the month of April to take the biggest hit, with demand for oil estimated at 72.3 million bpd, falling by 26.3 million bpd year-on-year, a 26.7% drop. Similarly, May’s demand is expected to fall by 19.5%, or 19.3 million bpd to 79.5 million bpd.

This downgrade takes into account developments that have occurred up to and including Tuesday, April 21.

Road fuel demand:
Rystad Energy believes that total global demand for road fuels will fall by 10.5%, or by 5.0 million bpd year-over-year, a slight downgrade from last week’s report, where road fuels were expected to decline by just 9.6%.

Road fuel demand in 2019 is estimated to have reached 47.4 million bpd, and is now seen to reach only about 42.4 million bpd in 2020.

Most of this reduction will take effect in April, which will see road fuel demand limited to just 31.8 million bpd globally, down from 47.3 million bpd a year ago, a 33% drop. May’s road fuel demand is now estimated at 38.0 million bpd from 47.4 million bpd last year, down by almost 20%.

Jet fuel demand:
Among the various fuel sectors, Rystad Energy expects jet fuel to be hit the hardest. Global commercial air traffic is expected to fall by at least 24% this year versus the levels seen in 2019, which Rystad Energy estimates 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, laying off unprecedented numbers of employees as many non-essential routes are closed.

As a base case Rystad Energy now assumes that the common summer air travel peak will not occur at all this year. The analysts now see global jet fuel demand falling by almost 31% year-over-year, or by at least 2.2 million bpd. Last year’s demand for jet fuel was seen at about 7.2 million bpd.

Jet fuel demand in April will be as low as 2.6 million bpd and 2.4 million bpd in May.

Regional demand figures:
Total oil demand in the United States for 2020 is now forecast to fall by 2.1 million bpd to 18.4 million bpd, a 10.2% decline from 2019’s 20.5 million bpd. April will see a decline of 29.4%, with demand falling from 20.1 million bpd to 14.1 million bpd. May will see a decline of 21.3%, with demand falling from 20.3 million bpd to 15.9 million bpd.

The US’ road fuel demand in 2020 will fall by 1.1 million bpd, a 9.8% decline to 10.1 million bpd from last year’s 11.2 million bpd. April will see a decline of 37.2%, with demand falling from 11.3 million bpd to 7.1 million bpd. May will see a decline of 21.9%, with demand falling from 11.4 million bpd to 8.9 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% decline from 2019’s 14.2 million bpd. April will see a decline of 34%, with demand falling from 14.5 million bpd to 9.6 million bpd. May will see a decline of 25%, with demand falling from 14 million bpd to 10.5 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 36.1%, with demand falling from 7.2 million bpd to 4.6 million bpd. May will see a decline of 21.7%, with demand falling from 6.9 million bpd to 5.4 million bpd.

Total oil demand in China for 2020 is now forecast to fall by 1.2 million bpd to 12.5 million bpd, a 8.6% decline from 2019’s 13.7 million bpd. April will see a decline of 3.8%, with demand falling from 13.1 million bpd to 12.6 million bpd. May will see a decline of 11.3%, with demand falling from 14.2 million bpd to 12.6 million bpd.

China’s road fuel demand in 2020 will fall by 0.3 million bpd, a 5.7% decline to 5 million bpd from last year’s 5.3 million bpd. April will see a decline of 4%, with demand falling from 5 million bpd to 4.8 million bpd. May will see a decline of 10.7%, with demand falling from 5.6 million bpd to 5 million bpd.

Other report findings:
The COVID-19 Report, aside from energy related projections, 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.

Rystad Energy’s numbers will be adjusted weekly for every new dramatic step taken by governments to slow the spread of COVID-19.

The latest updated version of the report will always be publicly accessible at https://www.rystadenergy.com/globalassets/pdfs/rystad-energy_covid-19-report_22-april_2020_openaccess.pdf