Platts cuts India's 2021 oil demand by 28%
Published On: Friday, May 14, 2021 | By: Team KnowMyStock
India’s demand for oil & gas has been cut by S&P Global Platts amid the second wave of Covid cases that have triggered lockdowns across key states since the past few weeks. For 2021, it now pegs the oil demand growth at 350,000 barrels per day (b/d), down from a forecast of 485,000 b/d made in February – translating into a fall of nearly 28 percent. India's city gas demand, Platts said, could drop by 25 – 30 percent in the coming months. However, once the lockdowns are lifted, Platts expects the pent-up demand to get released, which in turn will act as a catalyst for economic growth and trigger a demand uptick for oil & gas in the country. Besides India, the demand forecast for 2021 has been revised down for Western Europe and Latin America due to more restrictions stemming from the second and third waves of Covid. Brent oil prices, WU said, will peak in mid-2021 at over $70 per barrel.
Elevated commodity prices, including that of oil, analysts say, are likely to fan inflation going ahead, which will be detrimental for India.
“Investors should prepare for the biggest inflation scare since the early 1980s as pent-up demand is triggered as the American economy normalises. It remains the case that the timing of the severity of the inflation scare will be determined by what happens with inflation expectations. And they have risen over the past week as a result of the 'shockingly' weak jobs data and the surge in April CPI inflation,” wrote Christopher Wood, global head of equity strategy at Jefferies in his latest weekly note to investors.
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