Clarifies period of demand drop.
First quarter global petroleum and liquid fuels consumption will fall by nearly 1pc in 2020 and demand growth will slow as worldwide travel stalls in response to a rapidly spreading coronavirus, according to the Energy Information Administration (EIA).
The administration's latest Short Term Energy Outlook concentrated economic impacts from the virus to the first half of the year, anticipating rising demand, oil prices and a strong global economy in the final six months of 2020.
Global petroleum and liquid fuels demand would increase by 400,000 b/d in 2020, down from a 1pc growth rate in February's outlook. The first quarter decline and flat second quarter to 2019 would give way to a stronger second half of the year. Global liquid fuels stockpiles will increase by 1mn b/d, mostly in the first half of the year, before slowing fuels production and rising crude prices begin to drain inventories again, according to the administration. Global stockpiles would fall by 400,000 b/d in 2021.
US consumption declines would continue into the second quarter, according to the EIA. Diesel fuel suffered most of the US demand drop under the latest EIA outlook. Consumption averaged 4.02mn b/d for 2020, down by 1.2pc from the February outlook, following a steep reduction in first quarter demand assumptions. Distillate consumption for the period fell by 4pc to 3.92mn b/d, and was lower in the second and third quarters before increasing by 0.4pc to 4.13mn b/d in the fourth quarter outlook. US diesel demand for 2021 also fell, by 0.1pc to 4.11mn b/d.
US jet fuel consumption shrank from the February outlook by 0.5pc, or 10,000 b/d, to 1.77mn b/d. EIA expected a stronger second half of the year to offset a drop in first half consumption by 0.5pc to 3.41mn b/d, compared to the February outlook.
Lower retail prices would spur US gasoline consumption higher by 0.2pc to 9.28mn b/d. The increase would keep consumption effectively flat to 2019 levels. EIA increased its outlook for consumption in every quarter of the year. Prices would average $2.14/USG for the year, a nearly 16pc drop from the February outlook. Average prices for 2021 were revised lower by 12pc compared to the February outlook, to $2.33/USG.
