Global oil demand will rise in 2021, but not enough to surpass 2019 levels as the coronavirus pandemic continues to weigh on transportation fuel demand, especially jet fuel, according to S&P Global Platts Analytics.
"Oil demand will rebound by more than 6 million barrels per day in 2021, but consumption is still expected to be more than 2 million bpd below that of 2019's 101.9 million bpd. Why? The global middle class - the real engine of oil demand - faces continued pressures from wealth inequality and the ongoing COVID-19 cloud," said Chris Midgley, Global Head of S&P Global Platts Analytics.
The outlook presumes a recovery in global gross domestic product, highlighted by an acceleration of growth in the second half of 2021.
The rollout of effective coronavirus vaccines has "created a wave of optimism across commodity markets despite the fundamentals being unchanged," said Midgley.
"While in the long-term we are more optimistic about a rebound of oil demand, causing us to upwardly revise our 2021 demand outlook, in the short term, we expect things to worsen, with increased second-wave lockdowns in US and Europe resulting in much weaker gasoline demand across the holiday season," Midgley added.
Due to the sharp reduction in air travel, kerosene/jet fuel demand represented more than a third of the overall demand decline in 2020, about 3.1 million bpd out of total demand loss of 8.7 million bpd.
