IEA presents the Oil Market Report (OMR) on April 15, 2020.
Demand in April is estimated to be 29 mb/d lower than a year ago, down to a level last seen in 1995.
For 2Q20, demand is expected to be 23.1 mb/d below year-ago levels.
The recovery in 2H20 will be gradual, in December demand will still be down 2.7 mb/d YoY.
Global oil supply is set to plunge by a record 12 mb/d in May, after OPEC+ forged a historic output deal to cut production by 9.7 mb/d from an agreed baseline level.
As April production was high, the effective cut is 10.7 mb/d.
Additional reductions are set to come from other countries with the US and Canada seeing the largest declines.
Total non-OPEC output falls could reach 5.2 mb/d in 4Q20, and for the year as a whole output may be 2.3 mb/d lower than last year.
Refining throughput in 2020 is forecast to fall 7.6 mb/d y-o-y to 74.3 mb/d on sharply reduced demand for fuels.
Global refinery intake is expected to plummet by 16 mb/d y-o-y in 2Q20, with widespread run cuts and shutdowns in all regions.
Although refinery runs are falling, product stocks are still expected to build by 6 mb/d.
In 2H20, refining activity will slowly recover as the global market moves into deficit.
Early data show China’s implied stock build in 1Q20 at 2.1 mb/d, and US stocks increased by 0.5 mb/d.
OECD data show that industry stocks in February fell by 35.4 mb to 2 878 mb as a draw for products more than offset a build in crude.
Total OECD oil stocks stood 42.4 mb below the five-year average and, due to the weak outlook, now provide 79.2 days of forward demand coverage.
In March, floating storage of crude oil increased by 22.9 mb (0.7 mb/d) to 103.1 mb.
Brent has recovered modestly from an 18-year low as producers reached agreement to curtail output and is trading at $31/bbl.
Weak demand pushed prices for crude grades such as WTI Midland and West Canadian Select below $10/bbl.
Cracks for gasoline and jet fuel continued to suffer as containment measures were introduced.
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