IEA remarks in its latest monthly report
- Global oil supply fell by 2.4 mil bpd in June to a 9-year low of 86.9 mil bpd
- Demand decline in Q2 2020 was less severe than expected
- Raises 2020 oil demand forecast by 400k bpd to 92.1 mil bpd
- Crude oil floating storage fell by 34.9 million barrels to 176.4 million barrels from all-time high seen in May
If you go by the numbers, the latest take by the IEA is certainly encouraging but they reserve caution amid the accelerating number of coronavirus cases. Adding that they see the risks skewed towards the downside for the oil market.
The agency says that demand should rebound sharply in Q3 as economic activity resumes but a flare-up in virus cases is "casting a shadow over the outlook".
If anything, the fact that some countries have vowed not to return to mass lockdown is good news for oil - in the sense we won't see a similar collapse as we did in April. But rising virus cases and partial lockdowns will still limit demand conditions moving forward.
