COVID-19 Dooms the Climate… Again! IEA: Oil Demand to Soon Exceed Pre-Lockdown Level

Alternate Title: Peak Oil Foiled Again

Guest “too fracking funny for words” by David Middleton

IEA chief says low oil prices will take demand beyond pre-crisis highs
By JAVIER BLAS on 5/25/2020

LONDON (Bloomberg) –Global oil consumption hasn’t peaked, the head of the International Energy Agency warned, throwing cold water on hopes the coronavirus will cap demand and reduce climate-changing emissions.

“In the absence of strong government policies, a sustained economic recovery and low oil prices are likely to take global oil demand back to where it was, and beyond,” Fatih Birol said in an interview.

[…]

The world consumed last year nearly 100 million barrels a day of oil, and some in the energy industry believe that could mark the peak for global demand. Their hypothesis is that the coronavirus outbreak will trigger changes, like widespread working-from-home and less overseas travel, reducing consumption permanently.

“Could it be peak oil? Possibly. Possibly. I would not write that off,” the head of British oil major BP Plc, Bernard Looney, told the Financial Times.

If true, that would have huge implications for climate change as burning less oil would permanently reduce greenhouse emissions, easing the way to meet the goals of the Paris climate agreement. But Birol warned governments that the coronavirus will only reduce oil demand briefly, with consumption dipping in 2020 to about 91 million barrels a day, before rebounding in 2021 and beyond.

[…]

Birol is urging governments to use their economic recovery packages to fight climate change, spending on green energy to help to achieve the goals set in the 2016 Paris accord.

[…]

World Oil

In the U.S., the recovery of gasoline demand is well underway. After a 42% decline from mid-March to early-April, motor gasoline supply grew by 23% through mid-May. Diesel fuel demand has actually increased a little since the lockdowns began… Because if the truckers hadn’t kept rolling, we would all be dead by now.

Orange curve = refinery gasoline supply. Blue curve = refinery low sulfur distillate fuel supply. EIA

To quote John Travolta from Broken Arrow: “Yeah. Ain’t it cool?”

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29 thoughts on “COVID-19 Dooms the Climate… Again! IEA: Oil Demand to Soon Exceed Pre-Lockdown Level

  1. Even with Wolf trying to jail people for working and going to church here in PA everything is already picking up, so yea, once everyone is doing their thing again oil/gas/diesel use is going to jump. AC season is already kickin’ it so electric use is climbing nicely, too.

  2. It’s a probably a short-lived effect of high torque and good traction off the starting line. Still, here’s to prudent and bold, and a productive life.

    • Walt D – I would go much further and say that, rather than just correlated with, economic activity heavily depends on the consumption of oil (aka energy). Frankly, I am surprised that this relationship is not taken for granted by everyone, despite the many green wishful thinkers that want us to think otherwise, in order to further their own ends. Thanks to the global effects of COVID-19, we now have part of the proof – that oil consumption drops when economic activity drops.

  3. It’s a classic tragi-comedy. The losers are so wrong so often that we just laugh but… if they ever get their way it will be ugly for all of us. A toast of encouragement to the hydrocarbon industry in difficult times. You are doing important work folks. Thank You

  4. Go get them, David! We could use a little Global Warming here in central Argentina, not that fossil fuel consumption actually helps. The next two weeks are predicted at below freezing temperatures, and snow for Wednesday. I live in Palmares (the Palms) and there is something profoundly disturbing about snow on palm trees. So let me guess, next Wednesday is when they will open the golf course? Trying hard to stay sane and safe, but it will be close.

  5. Let’s hope that this oil boom will put workers back to work and result in more demand and a better economy.

    My biggest fear as that new stimulus bills will include $billions for the states run by foolish governors who buy voter with unsustainable budgets, pay outlandish retirements for public employees to buy their votes, and additional $billions to buy votes of illegal aliens. All which result is huge deficits in their state budgets.
    Fiscally responsible governors and state legislators might have their growth lessened to pay for those irresponsible “vote buying” governors. This could put a damper on the entire national growth and only encourage more leftist politicians to run up huge deficits in their states. We cannot handle even more massive deficits in our national debt.

    • Leonard: Trump has already put those “foolish governors” (we know who they are) on notice. He probably won’t cut them off completely (if there is another stimulus, we’ll see) but he’ll make them squirm and they won’t get what they ask for.

      • “He probably won’t cut them off completely”

        I’m sure Trump will continue to fund essential services like police and and fire and medical personnel, even in the Blue States.

        It would be a good idea to have the Blue States on a sound financial basis. I saw a comparison on tv the other day where it showed that New York, New Jersey, California, Illinois and Michigan make up 30 percent of U.S. GDP, so if those states are in fiancial straights then their economies are not operating at the optimum, so if their State GDP is reduced by their debts, that also reduces the GDP of the USA as a whole.

        So it would be to the nation’s advantage to have all States be fiscally sound. We could probably pay down the Blue State debt in return for them making economic reforms like balancing their budget every year.

        Of course, we also need a comprehensive debt reduction plan which we will get if American voters give Repubicans all the power this time around. We could balance all the budgets without making it painful for the average American. Think “Penny Plan”. I know Trump thinks about it. I’ll bet if Trump had a Repubican House and Senate, he would put it into action.

        • Yeah, the dems would agree up until Trump leaves office and then they’d revert to their old tricks. Regan used to say of the Soviet Union, “Trust but verify”, the Blue States haven’t even gotten to the ‘Trust” part of that statement.

        • Watching Minneapolis tonight where the National Guard has never materialized and the police have literally cut and run, why bother funding them?

          • “Watching Minneapolis tonight where the National Guard has never materialized and the police have literally cut and run, why bother funding them?”

            There are a lot of people in Minneapolis who are not out there destroyig their city. They deserved police protection and it is ubelievable that the Minneapolis mayor and the governor of Minnesota have allowed this situation to get out of control like it has. There is no leadership in Minnesota.

            The murder of George Floyd is an outrage, and the Minnesota authorities should arrest and charge these police officers involved with murder. There is no doubt what happened in this situation. No justification for putting your knee on a handcuffed man’s neck, and then listen to him begging to be allowed to breath. One of the worst things I have ever seen.

            As for the looters, they deserve to be shot. With rubber bullets to begin with. They are out for themselves, not for George Floyd. George is just their excuse for breaking the law. And apparently the Minnesota authorities have given the looters free reign of their cities.

            Don’t come looting around my house. You might regret it.

        • Blue state governors could fund essential services if they wanted to.
          The problem is like the various government shutdowns over the last few decades, those in charge shut down essential services first, in order to blackmail the voters into giving those in government what they want.
          There are a lot of things that could be shut down, but they always choose the things that hurt the most, to shut down first.

        • I wish I had any confidence that R’s winning out arresting reckless spending. They also show a propensity for vote buying schemes. The insanity that will ensue if Pelosi and company take the reins make it the better option by far. With them taxes and regulation will go hog wild, growth will never come back and our fiscal mess will reach an unfixable place, I fear.

  6. “Birol is urging governments to use their economic recovery packages to fight climate change”

    Which goes to explain why IEA is heavily slanted towards alarmism and blaming fossil fuel companies.

  7. Isn’t this what the whole AGW narrative is built on? Cripple the energy usage and you cripple the economy? Now that people have had a taste of what the GND would bring them what do they think now?

  8. I see other signs the economy is picking up.

    Tracking the number of messages in my weekly SPAM report, before the lockdown I was getting 70-100.

    Here’s the last ones I recorded:

    Date Messages
    2019-07-31 120
    2020-01-29 72
    2020-02-26 50
    2020-03-04 42
    2020-03-11 40
    2020-03-18 24
    2020-03-25 30
    2020-04-08 49
    2020-04-15 50
    2020-04-22 54
    2020-04-29 61
    2020-05-06 57
    2020-05-13 70
    2020-05-20 78

    I have noticed all the recent SPAM messages have been for remote thermometers.

    I’ll know the economy is fully recovered when I get back over 100 in a week 🙂

    • Pure speculation on my part since I haven’t had time to isolate and test the theory but I suspect all those SPAM messages are NOT trying to sell thermometers. I too have been getting hundreds of them every week and while quite a few are from the usual suspect ISPs who seem to make a living by selling services to spammers and hackers the vast majority are being sent from what is obviously hacked commercial small business networks who probably have no idea they are being used.
      One thing I have noticed is that the content of the mail is extremely similar no matter where it comes from and in many cases is absolutely identical. Also I receive it to my honeypot addresses which I use to identify leaks and sources and also to identify which spammers/hackers share which lists.
      As speculation I am guessing that they are less interested in getting someone to buy a thermometer and much more interested in getting people to click on the links or download/execute the “remote content enclosed” which I would bet heavily includes malware of some type.
      I’d love to know if anyone has dug deeper into these spam mails as they seem to vary from the usual junk that comes into my mail server.
      Yes, this is 100% speculation on my part and I freely admit that if skepticism was a religion I’d be Pope.
      If anyone has dug deeper I’d love to hear your results and any speculations anyone has on this.

  9. “Could it be peak oil? Possibly. Possibly. I would not write that off,” the head of British oil major BP Plc, Bernard Looney”

    His name says it all even as the climate looneys pray for pandemics to save the planet.

  10. Well the next 10 year tipping point as the very very very last chance not to be doomed has been put off for a year and with chilly old Glasgow there’ll be a warm up in Italy beforehand-
    https://www.msn.com/en-au/news/world/un-delays-crucial-climate-summit-for-a-year-cites-pandemic/ar-BB14JlBH
    With social distancing no cruise liners or busses in the air so Gretaheads attending the kneesup will need to book every available yacht and catamaran fairly soon.
    Benvenuto and Hoots Mon!

  11. David,

    Sorry, I do appreciate your optimism but the coast is far from clear. This is not even a “deep” cyclical issue, it is multifactorial-structural; a true Phase Change in how global society has been, and is, organised.

    While I predict that the fallout will ultimately result in COVID-19 being downgraded to a “Cat 2 hurricane” – I also expect the largely unseen 2nd, 3rd and 4th round effects to be powerful, and non-linear. The monetary, socio- and geopolitical slopes were avalanche-ready before the virus rolled into town. Energy consumption and flows will ultimately reflect that.

  12. David,

    Sorry, I do appreciate your optimism but the coast is far from clear. This is not even a “deep” cyclical issue, it is multifactorial and structural; a true Phase Change in how global society has been, and is, organised.

    While I predict that the fallout will ultimately result in COVID-19 being downgraded to a “Cat 2 hurricane” – I also expect the largely unseen 2nd, 3rd and 4th round effects to be powerful, and non-linear. The monetary, socio- and geopolitical slopes were avalanche-ready before the virus rolled into town. Energy consumption and flows will ultimately reflect that.

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