The
International Energy Agency (IEA) expects global oil demand to see its first
quarterly decline in more than a decade due to the negative impact of the Coronavirus
on Chinese economy.

The
Paris-based IEA said in its monthly report released on Thursday that it expects
global crude demand to fall by 435,000 barrels per day (bpd) in the first
quarter of 2020, compared to the same period last year.

This
quarterly decline in global oil demand would be the first in more than 10
years, according to the IEA.

Expectations
of a decline in global crude demand in the first quarter prompted the agency to
lower its 2020 demand growth estimates by 365,000 barrels per day to 825,000
bpd, the lowest level since 2011.

The
Energy Agency also said that lower-than-expected consumption from OECD
countries has reduced estimates of global crude demand growth for 2019 to
885,000 barrels per day.

The
IEA’s projections of a reduction come as the Coronavirus, which has infected
more than 59,000 people in China and has killed more than 1,300 people,
continues to weigh on global market sentiment and China’s economic activity.

The
energy agency said the consequences of the new Coronavirus will be significant
for global demand for crude, oil prices and producers.

“At
the producer level, prior to the Corona crisis, the market was expected to move
towards balance in the second half of 2020 due to a combination of production
cuts implemented at the beginning of the year, increased demand and reduced
supply from outside OPEC,” the IEA added.

According
to the monthly report released by OPEC on Wednesday, estimates of global oil
demand growth in 2020 have been revised down by 0.23 million barrels per day to
0.99 million barrels per day.

Meanwhile, Brent crude reached $55.25 per
barrel, compared to the sessions open at $55.76 a barrel, erasing its earlier
gains when it touched a high at $56.16.  

West Texas Intermediate
(WTI) crude futures traded at $50.91 per barrel, noting that it slumped to a
low of $49.30 last week, the lowest since January 2019.

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