By Adedapo Adesanya
After a run of fall in the prices of crude oil in the last few days, futures returned to the positive zone on Tuesday despite another bearish view on oil demand.
The international benchmark futures, Brent crude, rallied by 2.73 per cent or $1.08 to trade at $40.69 per barrel while the US benchmark crude futures rose 3.22 per cent or $1.20 to $38.46 per barrel.
The International Energy Agency (IEA) was the latest to release bearish outlook on demand, following pessimistic calls from the Organisation of the Petroleum Exporting Countries (OPEC) and other groups.
The IEA trimmed its outlook for worldwide oil demand growth to 91.7 million barrels per day. That marks a contraction of 8.4 million barrels per day year-on-year, more than the 8.1 million barrels per day contraction predicted in its August report. That marked a contraction of 300,000 barrels a day more from last month’s report.
The market outlook has grown “even more fragile” with a resurgence of the pandemic, the IEA said Tuesday.
It added, “We expect the recovery in oil demand to decelerate markedly in the second half of 2020, with most of the easy gains already achieved.
“The economic slowdown will take months to reverse completely, while certain sectors such as aviation are unlikely to return to their pre-pandemic levels of consumption even next year.”
Looking ahead, the IEA said it expects worldwide oil demand to grow by around 5.5 million barrels per day next year, climbing to an average of 97.1 million barrels per day and in 2021.
This came a day after the OPEC again cut its 2020 demand outlook and cut its 2021 demand-growth forecast, citing the continued effects of the COVID-19 pandemic.
More than 29.5 million people have contracted COVID-19 worldwide, with 928,576 related deaths.
Meanwhile, US crude inventories are expected to rise for a second week in a row ahead of official government data from the Energy Information Administration (EIA) on Wednesday which will confirm numbers from the industry group, American Petroleum Institute (API) which comes out earlier than the official one.
