IMF sees oil demand shrink further to new lows

The coronavirus crisis will mean that global oil demand will decline by around 8 percent this year compared to last year, according to the International Monetary Fund (IMF) in a new report published by the Qatari daily The Penunsula. Oil prices this year will be 41 percent lower than in 2019, according to the IMF in its external report "Global Imbalances and the COVID-19 Crisis". According to the IMF, the direct effects of low oil prices on oil trade balances will vary depending on the economy and will reflect their dependence on oil exports and imports. The Fund's estimates for this year's decline in global oil demand are in line with other forecasters such as the International Energy Agency (IEA) and OPEC. Last month, the IEA said in its latest oil market report that global oil demand will plunge 7.9 million barrels per day (bpd) this year, but that forecast is a little more optimistic than last month's expectation, which saw a decline in Demand at 8.1 million bpd was expected. However, the IEA noted that the recent surge in COVID-19 cases and the reintroduction of partial lockdowns in some countries continue to add to the uncertainty surrounding global oil demand in 2020. This year the world is expected to consume an average of 92.1 million bpd of oil, compared to the typical demand of 100 million bpd, the IEA said. For its part, OPEC expects global oil demand to fall 8.9 million bpd in 2020 before rising 7 million bpd in 2021 if it is still lower than demand in 2019. The oil price plunge and production cuts following the coronavirus pandemic will hit oil exporters in the Middle East and North Africa (MENA) hard, with these countries' total oil revenues likely to decline by $ 270 billion this year from 2019, according to the IMF in his last update on the region last month.