Goldman Sachs has lowered its oil demand forecast for China for the next two months, citing rising concerns over the impact of the next wave of COVID-19 infections.
The Wall Street bank, which had earlier cut expectations last month for emerging market demand because of the Delta variant, now expects a demand hit of a million barrels per day (bpd) in China, it said in a note.
However, the bank said the net impact from Delta on its global oil demand forecast remained moderate and lowered demand forecast for next two months to 97.8 million bpd from 98.4 million bpd realised in July.
China’s latest surge of COVID-19 cases entered its fourth week with the highly infectious Delta variant detected in more than a dozen cities since July 20.
Oil prices dipped yesterday as analysts cut forecasts for fuel demand in China following mobility curbs over the spread of coronavirus, offsetting a bullish outlook for US fuel demand.
“The base case remains that the Delta wave will impact demand, including in China, for only two months, consistent with prior cycles, including most recently in India,” Goldman said, adding that oil demand in the European Union Latin America and India was moving to the upside.