Oil seen down 9.4%, jet fuel down 31%, road fuel down 9.4% in 2020

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, we are making substantial frequent updates to most of our estimates.

Global oil demand:

In another consecutive revision of our weekly estimates, our newest forecast for oil demand now projects a decrease of 9.4% for 2020, or 9.4 million barrels per day (bpd) year-on-year. Our estimates show that total oil demand in 2019 was approximately 99.9 million bpd, which is now projected to decline to 90.5 million bpd in 2020. To put the number into context, last week we projected a decrease of 6.4 million bpd.

At the moment we expect the month of April to take the biggest hit, with demand for oil estimated at 72.6 million bpd, falling by 27.5 million bpd year on year, a 27.5% drop. Similarly, May’s demand is expected to fall by 19%, or 19.1 million bpd to 79.9 million bpd.

This downgrade takes into account developments that have occurred up to and including Tuesday, April 7.

Road fuel demand:

We believe that global total demand for road fuels will fall by 9.4%, or by 4.5 million bpd year-on-year, a downgrade from last week’s report, where road fuels were expected to decline by just 5.6%.

Road fuel demand in 2019 is estimated to have reached 47.7 million bpd. We now see it reaching only about 43.2 million bpd in 2020.

Most of this reduction will also take effect in April, which will see its road fuel demand limited to just 32 million bpd globally, down from 47.7 million bpd a year ago, a 33% drop. May’s road fuel demand is now estimated at 38.2 million bpd from 47.6 million bpd last year, down by almost 20%.

Jet fuel demand:

Among the various fuel sectors, we expect jet fuel to be hit the hardest. We expect global commercial air traffic will fall by at least 23% this year versus the levels seen in 2019, which we estimate 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 we now assume that the common summer air travel peak will not occur at all this year. We now see global jet fuel demand falling by almost 31% year-on-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 in May 2.4 million bpd.

Regional demand figures:

Total oil demand in North America for 2020 is now forecast to fall by 2.3 million bpd to 22.6 million bpd, a 9.2% decline from 2019’s 24.9 million bpd. April will see a decline of 30%, with demand falling from 24.6 million bpd to 17.2 million bpd. May will see a decline of 21.5%, with demand falling from 24.6 million bpd to 19.3 million bpd.

North America’s road fuel demand in 2020 will fall by 1.3 million bpd, a 9.6% decline to 12.2 million bpd from last year’s 13.5 million bpd. April will see a decline of 37%, with demand falling from 13.5 million bpd to 8.5 million bpd. May will see a decline of 21.3%, with demand falling from 13.6 million bpd to 10.7 million bpd.

Total oil demand in Europe for 2020 is now forecast to fall by 2.3 million bpd to 12.7 million bpd, a 11.2% decline from 2019’s 14.3 million bpd. April will see a decline of 33%, with demand falling from 14.5 million bpd to 9.7 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 9.9% decline to 6.4 million bpd from last year’s 7.1 million bpd. April will see a decline of 35%, with demand falling from 7.2 million bpd to 4.7 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 million bpd to 12.7 million bpd, a 7.3% decline from 2019’s 13.7 million bpd. April will see a decline of 13.8%, with demand falling from 14.5 million bpd to 12.5 million bpd. May will see a decline of 11%, with demand falling from 14.2 million bpd to 12.7 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.

Our numbers will be adjusted weekly for every new dramatic step taken by governments to slow the spread of Covid-19.