Grounded commercial aircraft are seen parked at Victorville Logistics Airport in Victorville, Calif., on April 22. The IEA report cited low demand for aviation fuel as a major factor in its revised forecasts. File Photo by Jim Ruymen/UPI | License Photo
Aug. 13 (UPI) -- The International Energy Agency lowered expectations on Thursday for world oil demand for the rest of this year and next.
The IEA downgraded its demand forecast for all of 2020 to 91.1 million barrels per day, 8.1 million per day fewer than 2019 and 140,000 per day lower than its previous assessment.
For 2021, the agency lowered its demand estimate by 240,000 barrels per day.
The IEA said the downgrade reflects "stalling mobility" brought on by the COVID-19 crisis and "weakness in the aviation sector." It listed jet fuel demand as a "major source" of weakness.
The downgrade follows reported losses by the largest oil and gas companies in the second quarter.
The global energy sector has so far declined by 36%, making it the most underperforming sector on the S&P 500.
"Global refinery intake is recovering, but the pace will lag behind the demand rebound as product inventory levels are very high," the IEA said in its report.
"In 2020, runs will decline ... but in 2021 they will rebound by only 4.5 million barrels per day."
The IEA attributed the revised forecast to a resurgence of cases worldwide, forcing many nations to slow reopening their economies and keep travel restrictions in place.
"Easing of the first wave of confinement measures was bound to lead to a resurgence of cases as normal activity resumed," the IEA report added. "It remains to be seen if the increase in cases heralds a second wave or it is merely a regular fluctuation that we will see over time."