The oil price remained steady again in August at just over $40 per barrel. After a period of uncertainty caused by Coronavirus and the subsequent price war, trade in crude oil remained relatively weak. Consequently, we are seeing a return to the fundamentals of a weaker market due to reduced global activity.
Crude oil demand was down 5% in August, in tonne mile demand, following falls in June and July. China demand has dropped by 5 million tonnes from July as it re-adjusts from a period of over stocking. The only resurgence was in India which imported 17.3 million tonnes up from a low of 10.8 million tonnes in May.
Oil products remained relatively stable with Gasoline trade at the highest level since March. Tonne mile demand in products seems to be much higher than last year providing a boost, even if absolute volumes are much lower. Our forecast for 2020 suggests Crude oil will have fallen 4 percent in volume but only 2% in terms of Tonne mile demand.