Shifting oil demand forecasts are in the spotlight this week as the coronavirus pandemic continues to curb economic activity in major economies. Plus, China’s crude overhang, and trends in power, gas and LNG.
1. Mobility data dampens oil demand outlook
What’s happening? Mobility indicators, a key proxy for oil demand, are flatlining or falling in some of the world’s biggest oil-consuming countries amid growing fears over a resurgence in COVID-19 cases. In the US, the nation worst hit by the pandemic, Google data shows evidence of a July slowdown in economic mobility, which dipped to 25% below pre-crisis levels in the week to July 26.
What’s next? Rising coronavirus infection rates have already prompted some oil market analysts to cut their demand forecasts, most of which had previously predicted that oil demand would recover from an April nadir of around 80 million b/d sometime during 2021. A softer demand outlook, together with 2 million b/d of supply that was due to return to the market from OPEC+ from August 1, is also weakening the near-term market balance and capping oil price gains.
2. China’s oil import bonanza runs out of steam
What’s happening? Low prices in the first
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