Oil demand ‘unlikely to rebound until Q3 2023’

Oil demand ‘unlikely to rebound until Q3 2023’

DUBAI, 8 hours, 5 minutes

ago



Global oil demand will not return back to pre-virus levels until the third quarter (Q3) of 2021, and a forecast of 2.5 million barrels per day (m b/d) quantum is seen as a permanent level of demand destruction, a report said.



Despite an assumed pick-up in momentum over the summer, we forecast that global liquids demand will only expand to an average 97m b/d by year-end, as aviation demand in particular is slow to convalesce losses, said Mitsubishi UFJ Financial Group (MUFG), a Japanese bank holding and financial services company, in its latest Oil Market Weekly report.



"As a result - absent the risk of iterative virus waves - we model 2020 annualised global oil demand ~8mb/d lower at 92m b/d. We believe global oil demand will breach the pre-virus run-rate of 100m b/d only in Q3 2021, averaging 98.6m b/d in 2021,“ the report said.



"This is 2.5m b/d lower than our previous assessment, and we adopt this quantum as the permanent level of demand destruction, given we view the fall-out from Covid-19 will be long-lasting. As the world emerges from lockdowns, a combination of weaker economic growth and