- Novel Coronavirus to Hurt Oil Demand – Goldman Sachs
The new coronavirus could impact global oil demand significantly in 2020, according to a projection by World’s oldest investment bank, Goldman Sachs.
The new type of Zoonotic coronavirus that brokeout in China, the world’s largest importer of crude oil, could plunge global oil demand by as much as 260,000 barrels per day, Damien Courvalin, a Senior Commodity Strategist at Goldman Sachs stated.
He said, “Ultimately we expect jet fuel markets — including cracks, regrade and Asian differentials — to decline most if this outbreak persists given the likely decline in regional air travel.”
Experts at Energy Aspects in London, however, said they do not expect oil demand to be affected much since the virus has not triggered global travel restrictions that were set in 2002-2003 during SARS crisis.
“While the SARS outbreak was estimated to have impacted up to 0.26 mbpd of oil demand globally, according to anecdotal reports, we currently do not expect global oil demand to fall significantly as a result of the coronavirus,” Energy Aspects said in a research note.
Even though there might be voluntary travel concellations, the energy firm do not expect the virus to have significant effect outside China to force World Health Organisation (WHO) to declare emergency situation.
“The World Health Organisation is currently hesitant to declare the coronavirus a public health emergency, meaning airline cancellations remain unlikely.”
“In a worst-case scenario that assumes the outbreak spreads across the nation, we expect jet demand growth to slow to 20,000 bpd year-on-year after having grown by 75 thousand bpd year-on-year in H2 2019,” Energy Aspects said in its report.