Freshly rested Ukrainian brigades were being rotated in those areas to replace units that had suffered losses
While oil demand could drop by 9 per cent, or 9 mb/d on average across the year, returning oil consumption to 2012 levels, coal demand could decline by 8 per cent, in large part because electricity demand will be nearly 5.0 per cent lower over the course of the year. Gas demand could fall much further across the full year than in the first quarter, with reduced demand in power and industry applications. Nuclear power demand would also fall in response to lower electricity demand. Renewables demand is expected to increase because of low operating costs and preferential access to many power systems, IEA said
"Global CO2 emissions are expected to decline by8.0, or almost 2.6 gigatonnes (Gt), to levels of 10 years ago. Such a year-on-year reduction would be the largest ever, six times larger than the previous record reduction of 0.4 Gt in 2009 - caused by the global financial crisis - and twice as large as the combined total of all previous reductions since the end of World War II. As after previous crises, however, the rebound in emissions may be larger than the decline, unless the wave of investment to restart the economy is dedicated to cleaner and more resilient energy infrastructure,' it said.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said: "While the oil market is heavily oversupplied this quarter, we expect it to move toward balance next quarter and become under-supplied in Q4 this year as lockdown restrictions are eased and oil demand picks up."
"We expect the market to sternly test global storage capacity in the coming 2-3 weeks which will likely lead to significant volatility with more spikes to the downside to front-month oil prices. This will continue until we reach the equilibrium of supply equating demand, given storage and filling capacity constraints - as with nowhere to store the oil, supply has no other option but to be shut-in in-line with the expected demand losses," said Ehsan Khoman, Director, Head of Mena Research and Strategy.
"It is at this inflection point that we view demand-supply fundamentals will become instantaneously balanced, carving out a cyclical bottom in oil prices. As such, whilst this ultra-bearish market is not yet over, with more downward volatility in the next 2-3 weeks, we now expect a rebound in prices once forced shut-ins soon fall sizably enough to drive markets to become balanced by late May - early June. Thus, we see upside risks to our end Q2 2020 Brent and WTI forecasts of $32/b and $28/b, respectively," said Khoman. Meantime, oil prices jumped on Thursday, buoyed by signs that the U.S. crude glut is not growing as quickly as expected and that fuel demand battered by COVID-19 restrictions is starting to pick up.
- issacjohn@khaleejtimes.com
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