Global oil demand is expected to dive by 910,000 barrels per day (bpd) in the first quarter, the U.S. Energy Information Administration (EIA) said on Wednesday, as the rapid spread of coronavirus has slammed economic activity and travel, raising the specter of a global recession.
Oil prices plunged by the most in nearly three decades on Monday as top producers Saudi Arabia and Russia began a price war that threatens to overwhelm global oil markets with supply even as demand has slid.
For the first quarter, EIA expects world crude oil and liquid fuels consumption to drop by 910,000 bpd from a year earlier to 99.06 million bpd. It previously expected demand to grow by 320,000 bpd. For 2020, the agency cut its world oil demand growth forecast by 660,000 bpd to 370,000 bpd.
U.S. crude oil production is expected to rise by 760,000 barrels per day (bpd) in 2020 to 12.99 million bpd, the EIA said, revising down its previous forecast for a rise of 960,000 bpd. It said it expected output in 2021 to drop by 330,000 bpd to 12.66 million bpd, compared to its previous forecast for a rise of 360,000 bpd.
The record pace of U.S. output growth has been slowing as companies pull back on spending on new drilling.