Rystad Energy has said that a second wave of the COVID-19 pandemic could see global oil demand in 2020 knocked down to 86.5 million barrels a day (b/d), compared to the consultancy's current base-case estimate of 89 million b/d.
Rystad Energy said it doesn’t expect the oil demand impact of a second wave to be as strong as was seen in the first outbreak, because ‘restrictive measures will be limited to particular regions and sectors’.
The consultancy continued: ‘We would expect these “smart lockdowns” to lower the negative demand impact, so as not to repeat the absolute low of 73.7 million b/d in April. The maximum negative demand impact in April 2020 was -26 million b/d, and the peak month in the second wave could come close to this at -18 million bpd, compared to the levels projected prior to the pandemic.’
Rystad Energy said that the rise of COVID-19 cases in the US is ‘of particular concern for the oil market given the country’s high oil consumption under normal circumstances, as this second wave could paralyze road fuel demand’.
Artyom Tchen, Rystad Energy’s senior oil market analyst, added: ‘COVID-19 will also re-emerge in other regions in our “second wave” scenario when the flu season starts in the northern hemisphere in September and October. In general, however, new waves of lockdowns in regions such as Europe, South America and Russia are expected to be more targeted and less strict as health systems will be better prepared than they were in April.’