World's 2020 oil demand growth virtually eliminated over COVID-19: OPEC

OPEC reduced the growth in world demand for oil from 990,000 barrels per day to 60,000 bpd, a 93 per cent drop.

The Organization of Petroleum Exporting Countries (OPEC) has announced that there would be practically no increase in the worldwide consumption of crude oil in 2020 due to the coronavirus impact on the global economy.

In its monthly report published on Wednesday, OPEC reduced the growth in world demand for oil from 990,000 barrels per day to 60,000 bpd, a 93 per cent drop, Efe news reported.

It calculated that the volume of crude that the world will need from the 13 cartel partners will be reduced this year by 5.8 per cent - or 1.73 million bpd - compared with 2019 to 28.18 million bpd.

"Following a considerably weaker economic growth for 2H19 in Japan, Euro-zone and in India, the COVID-19 related developments necessitated a further downward revision of the 2020 GDP growth forecast to 2.4 per cent from 3.0 per cent forecast in the previous month. This compares to a 2019 GDP growth estimate of 2.9 per cent... Further downside risks to the world economy remains given the uncertainty regarding the magnitude of COVID-19 related impacts," said OPEC in the report.

The estimates were based on the "adverse effects" that the epidemic have already had on transportation and on the industrial use of fuel in China, as well as on petroleum consumption in other regions hit by the coronavirus, including Japan, South Korea, Europe and the Middle East.

At this point, OPEC calculates that this year the total demand for crude will not exceed, in contrast to its earlier estimates, the psychological barrier of 100 million bpd, but rather will remain at an average of 99.73 million bpd provided that the world recovers relatively quickly from the crisis surrounding the spread of the virus.

What will the poor eat? Priyanka slams Modi govt on rising inflation

The Congress leader's comments come a day after data showed that retail inflation rose to about five-and-half year high of 7.35 per cent in December 2019, surpassing the RBI's comfort level.

Congress General Secretary Priyanka Gandhi Vadra on Tuesday hit out at the government over spiralling prices of vegetables and essential commodities which is hitting the poor.

The Congress leader's comments come a day after data showed that retail inflation rose to about five-and-half year high of 7.35 per cent in December 2019, surpassing the RBI's comfort level, mainly due to spiralling prices of vegetables as onions were selling costlier.

Priyanka Gandhi accused the government of picking pockets of the common man and also taking away their livelihood.

"The prices of vegetables and other edible commodities is getting out of reach of the common man.

What will the poor eat when vegetables, oil, pulses and flour turns expensive. The poor are not even getting employment due to the economic recession.

The BJP government has not just picked the pockets of the poor but also kicked on their stomach," she said in a tweet in Hindi.

Business Standard

Why India's upcoming general election is good news for the oil market

Election campaigning will boost fuel use in a nation where oil demand is already growing at the fastest pace in the world.

The largest democratic exercise on Earth is set to give the oil market a shot in the arm.

About 875 million Indians will go to polls over the next three months to elect their leader, dwarfing the 158 million Americans who registered to vote in the 2016 US residential elections. Before they vote, they’ll be courted by a slew of competing political parties -- a process that will boost fuel use in a nation where oil demand is already growing at the fastest pace in the world.

The lift will be provided by hordes of party faithful, who traverse teeming cities and remote villages across the world’s seventh-largest country in a campaigning frenzy before what’s expected to be a closely fought election. Their use of motorcycles and sports utility vehicles at a time when some refineries are closed for maintenance will support returns from making fuels in Asia over the next few months, according to a Bloomberg survey of traders who participate in the market.

“The election, which coincides with scheduled maintenance, should see India pull imports of gasoil and gasoline and this usually adds to bullish sentiment,” said WengInn Chin, a senior oil market analyst at Facts Global Energy in Singapore. In the lead up to the polls, the increased consumption is expected to increase gasoline and diesel demand by as much as 80,000 barrels a day, he said.

That will be in addition to the nation’s already growing demand for gasoline and diesel, consumption of which grew by about 75,000 barrels a day and 100,000 barrels a day, respectively, in January. Demand for liquefied petroleum gas is also surging, with state refiners seeking to import cargoes of the cooking fuel as the government tries to keep voter morale high by ensuring rural households are well supplied.

The profit from turning crude into diesel reached a two-month high late last month, and has climbed over 25 percent so far this year. Refinery maintenance will keep supplies tight in coming months, while the International Maritime Organization’s new rules on ship fuel next year will drive the fuel’s demand in the longer term. That’s set to keep the so-called crack at an average of $14.50 a barrel this month, according to the Bloomberg survey of traders.

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