The demand for oil would have suffered an unprecedented blow with the onset of the COVID-19 pandemic, falling an astonishing 21 million barrels a day. But according to Chief Analyst and Chairman at Wood Mackenzie, Simon Flowers, the industry seems to be showing early signs of recovery.
In his latest report on the industry, the analyst said that gasoline demand is bouncing strongly while noting that jet fuel will be much slower as global flight activity remains suppressed by restrictions on travel and dulled consumer appetite.
Be that as it may, Flowers said he expects a significant increase on the back of a recovering global economy, assuming no second waves of coronavirus. “We’re forecasting liquids demand to average 99 million barrels a day in 2021, a six million barrels a day jump from 2020. That would take global demand almost back on a par with 2019 but still three million barrels a day below our pre-crisis forecast for 2021,” the Chief Analyst stated.
As for oil demand by 2025, Wood Mackenzie said he reckons it will gain about another five million barrels a day from 2021 to 2025 and stand just one million barrels a day below pre-crisis forecasts. He said, “Our thesis is that the global economy is still heavily dependent on oil; there’s no ready alternative.”
At the same time, Flowers said there are irrepressible secular drivers of demand. He also noted that rising global population growth, Gross Domestic Product (GDP) growth and the expansion of the middle class will reassert themselves in the next few years and drive demand to new highs.