Today’s Pickup: Oil demand growth forecast cut over coronavirus outbreak in China

Oil demand growth forecast cut over coronavirus outbreak in China (Photo: Shutterstock)

Good day,

In the wake of the coronavirus breakout in China, OPEC has cut its oil demand growth forecast by 230,000 barrels per day (bpd) from last month’s estimate. It now expects global oil demand growth at 990,000 bpd, citing the havoc the coronavirus has had over industrial activity and people movement in China as a reason for the slowdown. OPEC reduced the Chinese oil demand estimate by 400,000 bpd for the first half of 2020 and by 200,000 bpd overall for 2020. The impact is expected to be particularly heavy on aviation fuels as flights have been grounded across many cities in China, with the country’s flights being banned from landing in airports in several countries.

Did you know?

The latest data from 2018 regarding emissions from electricity generation in the U.S. shows that only 6% of Americans live in a region where EV power generation emissions are worse than a 50 mpg car.


“The next few weeks should be critical, as further delays in the restart of production could begin to result in out-of-stocks at U.S. shelves as early as mid-April. Once labor does return, high ocean demand and limited air availability create other challenges. Our logistics contacts compared the issue to a port strike; every day of inactivity from here could delay an order by up to a week.”

— Edward Kelly, Wells Fargo analyst, on the impact of the coronavirus on global supply chains

In other news

Daimler can’t meet European CO2 targets but struggles with EV production

Daimler CEO Ola Kaellenius this week said that meeting 2020 and 2021 stricter emission targets in Europe “will be a challenge.” That could mean big fines for Daimler. (Electrek)

Boeing sees stagnant air cargo market ahead

The global air cargo industry is unlikely to grow this year because of the challenges in the China market due to the coronavirus. (Seeking Alpha)

Shale gas drillers are facing a perfect storm

With each passing week, the shale industry shows more financial stress. (Oilprice)

Shopify COO: Direct to consumer ‘is no longer a fad’ 

Shopify collected big bucks during the holiday shopping season, and that’s indicative of emerging retail trends. (CNBC)

Can you get coronavirus from a package shipped from China?

Many PC components and electronics are shipped directly from China. (Tom’s Hardware)

Final thoughts

Swedish-based startup Mapillary has come out with a report that estimates the loss to delivery companies due to imperfect directions, inaccurate maps, missed delivery windows and parking issues to be around $6 billion a year. On average, 78% of drivers were found to drive more than five extra miles every day, costing U.S. logistics companies $611 million annually in pointless miles. Delivery personnel lost 7 million minutes every year trying to find the drop-off location, which amounts to roughly $2.5 billion in wasted salaries. 

Hammer down, everyone!