Oil demand from China has dropped for the first time since 2009 as the coronavirus hits oil markets.
Wood Mackenzie has lowered its oil demand forecast for the first quarter of 2020 by nearly 900,000 barrels per day to 98.8 million b/d. Much of the drop is attributed to the efforts to contain the outbreak, which includes flight cancellations.
The energy consultancy says that the near-term impact of the coronavirus outbreak on oil demand remains uncertain as much depends upon when and how China's manufacturing industry restarts after the extended Lunar New Year public holiday.
Ann-Louise Hittle, vice president, macro oils, says: 'The Q1 2020 fall in Chinese demand – a 200,000 barrel per day drop to 13 million b/d – is the first year-on-year decline in the country's demand since 2009.
'OPEC is holding emergency talks to consider an additional 500,000 b/d/ cut, on top of its already agreed steep output quotas in a bid to balance the market and shore up crude prices. It is a dilemma for the group because the duration of the hit to oil demand – particularly from China, the world's largest oil importer – is not clear.'
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