We expect oil demand to fall by 180 kb/d y-o-y in 1Q20 and 1.3 mb/d in 2Q20, said IEA
In the second quarter of FY2020-21, India’s petrol demand is expected to fall by 350 thousand barrels per day because of mobility restrictions
New Delhi: India’s petroleum product demand is likely to drop by 8 percent to 4,597 thousand barrels per day in 2020, IEA (International Energy Agency) has said as part of its May oil market report. “We expect oil demand to fall by 180 kb/d y-o-y in 1Q20 and 1.3 mb/d in 2Q20. Consumption should return to year-ago levels by 4Q20. Overall, Indian demand is expected to drop by 415 kb/d in 2020. Gasoil/diesel and gasoline will be the most affected,” IEA said.
In the second quarter of FY2020-21, India’s petrol demand is expected to fall by 350 thousand barrels per day because of mobility restrictions placed in the wake of the lockdown. The IEA May oil market report has projected petrol demand to fall 60 percent year-on-year in April as well as May, as compared to the year-ago period.
Diesel demand to drop by 690 thousand barrels per day in Q2
According to the IEA May oil market report, diesel demand in India is projected to drop by 690 thousand barrels per day in the second quarter of 2020 and ATF (Aviation Turbine Fuel) and kerosene demand is projected to decline by almost 40 percent in April-May. Half of the kerosene demand pertains to usage as jet fuel and will, therefore, take a hit as airline operations are set to resume in a curtailed manner.
Overall, IEA expects India’s oil demand to contract to 4.60 million barrels per day in 2020, as compared to 5.01 million barrels per day recorded in 2019.
Domestic crude oil production will continue to decline in 2020: IEA
The agency expects domestic crude oil production to continue to decline in 2020. “The country’s largest producers cite increased water cuts and underperformance of wells at mature fields as key reasons for the shortfall. Restrictions on the movements of workers to onshore fields due to the Covid-19 lockdown was also a factor,” IEA said.
According to the report, crude oil production will remain subdued in the coming months and is projected to decline to 0.75 million barrels per day in 2020, as compared to 0.80 million barrels per day recorded in 2019.