Global oil demand has grown by 13 million barrels per day in the last four months, after hitting rock bottom last April in the coronavirus pandemic, but that recovery is expected to plateau just below pre-pandemic levels.
That assessment came on Tuesday from IHS Markit in a new report.
Crude oil demand surged from May to July and is now 89% of prior-year levels, compared to being at 78% in April, it said.
HIS Markit said it expects demand growth “to wane and plateau” at 92-95 million barrels through the first quarter of 2021.
That is about 92% to 95% of the prior-year levels, it said.
That is due travel, especially air travel and commuting to work, remaining subdued until Covid-19 is contained and vaccines are widely available, IHS Markit said.
“The meteoric rise of world oil demand from the lowest lows of the Covid crash is going to come up just short of a full comeback, at least for now,” said Jim Burkhard, HIS Markit vice president and head of oil markets, in a statement.
“For demand to fully return, travel especially air travel and commuting to work needs to get back normal. And that won’t happen until there is containment of the virus and effective vaccines,” he said.
HIS Markit said the number of air flights globally is about 30% below February levels but jet-fuel consumption is down 50% off 2019 levels since long-distance flights have not yet recovered.
U.S. gasoline sales are still 17% to 18% below prior-year levels, it said.
There will likely be supply deficits in the second half of 2020, due to renewed OPEC+ restraints and lower U.S. oil output, it said.
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