- Goldman Sachs predicts global oil demand will not return to pre-coronavirus levels until 2022 after a fall of 8% in 2020 and a rebound of 6% in 2021.
- Analysts said peak demand is unlikely this decade on the assumption that electric-vehicles will replace traditional modes in Europe, and a change in consumer behaviour reflected by a level shift down in business travel and commuting.
- Gasoline demand is expected to be the fastest to recover among oil products due to a transition in consumer behaviour from public commutes to private transport and increased use of cars compared to flights for domestic travel.
- The projection comes after global oil prices dramatically recovered in May and June after taking a beating in recent months.
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Goldman Sachs doesn’t expect global oil demand to “fully recover,” or jump back to pre-coronavirus levels, until 2022, but says a rebound will be driven by a revival in commuting, private transport and higher spending on infrastructure.
Global demand will fall by 8% in 2020 and rebound by 6% in 2021, Goldman Sachs analysts said in a note published Thursday.
The “biggest loser” to emerge from the pandemic in terms of fuel demand was jet fuel as air travel time reduced significantly, the analysts said. In the absence of a vaccine, a slump in consumer confidence in travelling could persist with a potential change over the longer term.
Jet fuel demand will not rebound to pre-crisis levels until 2023, Goldman said.
Among oil products, gasoline will see the fastest pick-up in demand helped by a shift in consumer behaviour from public commuting to private transport and an increased use of vehicles compared to airlines for domestic travel especially in the US, China and Europe, the analysts said.
Diesel demand is expected to recover to pre-crisis levels by 2021, pushed by an increase in government-spending on infrastructure.
The analysts expect electric-vehicle adoption in Europe to challenge diesel demand.
Goldman Sachs’ projection follows global oil prices recovering dramatically in May and June as economies eased lockdown restrictions and opened up across much of the world.
Both benchmark global oil prices rose over 80% in the second quarter, but are still stuck in bear market territory, down more than one-third since the start of 2020.
In a slightly varied forecast, the International Energy Agency expects a global recovery in oil demand by 2021.
The agency adjusted its prior forecast of global Brent crude demand falling by 9.1 million barrels a day since better-than-expected deliveries took place amid easing lockdowns.
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