IEA cuts demand outlook 2020 amid growing coronavirus cases

Oil field workers with Visco work on a pump jack on November 6, 2013 in North Dakota, United States.

Ken Kadeno | Corbis News | Getty Images

The International Energy Agency on Tuesday cited a “treacherous” path between weakening market sentiment, predicting an increase in 2020 oil demand and an increase in the number of reported coronavirus cases worldwide.

In a closely watched monthly report, the IEA trimmed its outlook to 91.7 million barrels per day to increase worldwide oil demand. This marked a year-over-year contraction of 8.4 million bpd, estimated in the Paris-based Energy Agency’s August report of a 8.1 million bpd contraction.

The IEA stated, “We expect oil demand to improve in the second half of 2020.

“The economic downturn will take months to completely reverse, while some sectors, such as aviation, are unlikely to return to pre-epidemic levels of consumption next year as well.”

International benchmark Brent crude closed at $ 39.52 a barrel on Tuesday morning, up about 0.2%, while US West Texas Intermediate crude (WTI) was down $ 37.18, down about 0.2%.

Oil prices have fallen nearly 40% since the beginning of the year.