Global oil demand is currently projected to expand by 1.4% in 2019 to reach 100.4m bpd, partly underpinned by expectations for relatively steady growth in global economic output. However, risks to this outlook continue to mount, with some signs of softening economic growth becoming apparent in certain regions, related in part to US-China trade friction, which point to weakening oil demand growth in industry and transportation in particular. For instance, the pace of Chinese oil demand growth is projected to ease from 4% in 2018 to 3% in 2019, with the share of global oil demand growth accounted for by China dropping from around 40% to 30% in the respective years. Efficiency gains and uptake of alternative fuels are also projected to hamper oil demand growth in the transport sector, reinforced by environmental policies aimed at limiting air pollution in both developed and developing economies. These factors are also projected to maintain pressure on global oil demand growth in 2020, with the pace of expansion softening slightly to 1.2%. Whilst the IMO 2020 global sulphur cap could have a small positive impact on oil demand growth in 2020 as refinery runs are increased to produce low sulphur fuels, the impact of the regulations is expected to manifest chiefly in the product mix used in different sectors.
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