A new report from the International Energy Agency forecasts a 6% drop in global energy demand for 2020, the largest ever in absolute terms.
In a new report, the International Energy Agency said it expects global energy demand to decline by 6% this year amid the coronavirus pandemic.
With roughly 4.2 billion people around the world subject to some form of lockdown in an effort to slow the spread of the coronavirus, the IEA is forecasting a 6% drop in energy demand for the year. In absolute terms this is the largest on record. Percentage wise, it's the steepest decline in 70 years.
The projections are based on the assumption that shelter-in-place and social distancing measures will slowly be eased in the coming months, with a gradual economic recovery following. "It is still too early to determine the longer-term impacts, but the energy industry that emerges from this crisis will be significantly different from the one that came before," he added.The impacts have already been felt. In the first quarter energy demand fell 3.8% year-over-year, wiping out all of 2019's demand growth.
Oil has also been heavily impacted. Roughly 60% of global demand for crude stems from driving and flying, so with people at home and planes grounded demand has fallen off a cliff. For the full year, IEA expects electricity demand to fall 5%, which would be the largest decline since the Great Depression."This decline is less than the anticipated fall in oil demand, reflecting the fact that natural gas is less exposed to the collapse in demand for transportation fuels. But it nonetheless represents a huge shock to a gas industry that is used to robust growth in consumption," the report said.
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