ON YOUR SIDE: Virus outbreak blamed for forecast fall in oil demand

COVID-19 causing first drop in oil use in decade: IEA

"The impact of the coronavirus outbreak on China's economy has added to the uncertainties surrounding global economic growth in 2020, and by extension global oil demand growth in 2020", it said.

On Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) slashed its forecast for global oil demand by 230,000 barrels per day. That would mark the first quarterly decline since the financial crisis in 2009.

"While steps taken in China to reduce its spread were adopted earlier than in the SARS crisis and have been far more extensive, the profound transformation of the world economy since 2003 means China's slowdown today is bound to have a stronger global impact", it said in the report.

Oil demand in China, the world's second-largest crude consumer, has plunged because of travel restrictions to and from the country and quarantines within it. Hubei Province, the epicentre of the outbreak, said on Thursday that the number of new confirmed cases there jumped by 14,840 to 48,206 on February 12 and deaths climbed by a daily record of 242 to 1,310.

With it estimating that China's worldwide air travel having fallen by 70 percent and domestic travel by half in the early part of the crisis, the IEA expects double digit drops in jet fuel demand in the country.

Oil refiner China National Chemical Corp said on Thursday that it would close a 100,000 bpd plant and cut processing at two others amid falling fuel demands. The cartel has cut production by a total of 1.7 million barrels per day since January 2017.

The International Energy Agency (IEA) has cut its 2020 growth forecast, saying that global energy demand is going to fall to the lowest level since 2011, having been hit hard by the coronavirus outbreak. Now management expects the oil production in the United States in 2020 will increase by 960 thousand barrels per day to a record 13.2 million barrels per day.

Wednesday's report comes after OPEC members and their allies, including Russian Federation, last week were unable to reach an agreement to deepen production cuts.

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