The plunge in consumption at the world’s third-biggest crude consumer will weigh on sentiment on oil prices and damp expectations for a strong global demand rebound in the summer. The International Energy Agency has lowered its 2021 global oil demand forecast from the impact of the raging virus outbreak in India, while OPEC and its allies are already taking a cautious view.
India has become the current global epicenter of the pandemic and the virus is spreading rapidly from urban centers to rural areas, where about 70 per cent of country’s 1.3 billion population live.
More than 300,000 daily infections are reported since April 22, straining the health system and overwhelming crematoriums and hospitals, and forcing bulk of Indian states to stay in lockdown.
The strict stay-at-home orders are constraining the movement of people, lowering fuel sales and curbing crude processing by refineries to manage its rapidly-growing stockpiles.
Spokespeople for Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp., declined to comment. The three retailers account for more than 90 per cent of the nation’s fuel sales.
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