Crude Oil Demand to Pick Up in H2 2020 After Coronavirus Impact
Arslan Butt • 1 min read
The CEO of Saudi Aramco, Amin Nasser, expressed confidence that the coronavirus impact on crude oil demand could be short-lived and could rebound during H2 2020. While speaking to Reuters, he stated, “We think this is short term and I am confident that in the second half of the year there is going to be an improvement on the demand side, especially from China.”
Crude oil prices have weakened significantly since early this year over rising concerns of reducing demand on account of the extended lockdown and trave restrictions in place across China. With other countries around the world also reporting more cases, the sentiment in oil markets has deteriorated further over fears of the virus’s impact on global economic growth.
Until last week, crude oil prices received some support over expectations that OPEC and its allies could implement further supply cuts when they meet in early March. However, there is considerable uncertainty on whether Russia will agree to such a plan.
However, with coronavirus cases spreading around the world, prices have weakened as any slowdown in economic growth will reduce the demand for oil across China and the rest of the world. So far, South Korea has reported a sudden increase in infections, followed by Italy and several countries in West Asia, including Iran, Kuwait, Oman and Bahrain.