IEA raises 2020 oil demand forecast but warns COVID-19 clouds outlook

The easing of lockdown measures in many countries caused a strong rebound to fuel deliveries, the International Energy Agency said. (AFP file photo)
Short Url
Updated 11 July 2020

IEA raises 2020 oil demand forecast but warns COVID-19 clouds outlook

  • Saudi Arabia cuts production by 1 million barrels per day more than required under OPEC+ deal
  • Easing of lockdown measures in many countries caused a strong rebound to fuel deliveries

LONDON: The world will need more oil this year than previously thought, according to the International Energy Agency (IEA).The Paris-based body boosted its forecast to 92.1 million barrels per day (bpd), up by 400,000 bpd from its last outlook report published in June. 

Still, the spread of the coronavirus pandemic remains a significant threat to the energy sector.

“While the oil market has undoubtedly made progress since “Black April,” the large — and in some countries accelerating  — number of COVID-19 cases is a disturbing reminder that the pandemic is not under control and the risk to our market outlook is almost certainly to the downside,” the IEA said in its report.

World oil demand is projected to decline by 7.9 million bpd in 2020 and to recover by 5.3 million bpd in 2021. 

FASTFACT

7.9 million

World oil demand is projected to decline by 7.9 million bpd in 2020.

Futures markets are betting that the oil market will move from substantial surplus in the first half of the year to a deficit in the second half.

But for refiners, any benefit from improving demand is likely to be offset by expectations of much tighter feedstock markets ahead, the IEA said. 

Global oil supplies fell sharply in June as the group known as OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and other countries including Russia, agreed to slash production.

The compliance rate, that is the degree to which countries meet their production cut commitments, was 108 percent. This included over-performance by Saudi Arabia which cut production by 1 million bpd more than required, reducing OPEC crude output to its lowest point in nearly three decades. 

In the US, oil production has tumbled as shale producer struggle to pump profitably as prices weaken.

Total US oil production fell by nearly 1 million bpd in April compared with March. The IEA expects that May and June will see further month-on-month falls of 1.3 million bpd and 0.5 million bpd, respectively. 


Chinese artificial intelligence company files $1.4 billion lawsuit against Apple

Updated 03 August 2020

Chinese artificial intelligence company files $1.4 billion lawsuit against Apple

  • Xiao-i argued that Apple’s voice-recognition technology Siri infringes on a patent that it applied for in 2004

SHANGHAI: Chinese artificial intelligence company Shanghai Zhizhen Intelligent Network Technology Co., also known as Xiao-i, has filed a lawsuit against Apple, alleging it has infringed on its patents.
The company is calling for $1.43 billion in damages and demands that Apple cease “manufacturing, using, promising to sell, selling, and importing” products that infringe on the patent, it said in a social media post.
Xiao-i argued that Apple’s voice-recognition technology Siri infringes on a patent that it applied for in 2004 and was granted in 2009.
Apple did not respond to a request for comment. Reuters was not immediately available to find a copy of the court filing.
The lawsuit marks the continuation of a row that has been ongoing for nearly a decade.
Shanghai Zhizhen first sued Apple for patent infringement in 2012 regarding its voice recognition technology. In July, China’s Supreme People’s court ruled that the patent was valid.