IEA lowers global oil demand amid COVID-19, slowdown in aviation

The International Energy Agency (IEA) lowered its global oil demand forecast for the first time in several months on Thursday, as the number of COVID-19 infections remains high and the ongoing slowdown in the aviation sector.

According to the monthly oil report, IEA slashed its 2020 outlook by 140,000 barrels per day (bpd) to 91.9 million bpd, registering a fall of 8.1 million bpd year-on-year.

The Paris-based agency also revised down its 2021 global oil demand estimate by 240,000 bpd to 97.1 million bpd.

IEA stated that the forecast reflects the slowdown in aviation and transport, both essential components of oil consumption, as they continue to struggle in the wake of the pandemic.

It estimated aviation activity was down by around two-thirds from normal levels in July.

The pandemic continues to affect road transport, with individuals avoiding unnecessary travel and work from home remains the main trend in most parts of the West.

The energy agency expects global oil supply to fall by 7.1 million bpd in 2020 and rise by 1.6 million bpd next year.

It added that oil supply rose by 2.5 million bpd to reach 90 million bpd in July.