Forecasts of demand losses due to the ongoing coronavirus outbreak are rising, both within and beyond China. But, as with the trajectory of the virus itself, the oil market impact is highly uncertain. The official number of coronavirus cases shot up to almost 65,000 as of 14 February, 99% in China. But even the trajectory of the infection rate remains uncertain. So it should come as no surprise that the oil demand impact is also up in the air: though, worryingly, recent revisions have been in an upward direction.
The IEA monthly oil market report, released 13 February, cut its 2020 global oil demand forecast by 480,000 b/d, including 1.32mn b/d for Q1 (MEES, 14 February). This is “based on an assumption that… the epidemic can be brought under control in 2Q20” with oil demand in China and globally “expected to normalize in 3Q20.” (CONTINUED - 508 WORDS)