What’s going on?

The International Energy Agency (IEA) cut its forecast for global oil demand, despite the recently announced vaccine.

What does this mean?

• Oil’s price has been rising since Pfizer and BioNTech reported the success of their coronavirus vaccine trial, renewing hopes for an uptick in demand.
• But the IEA doesn’t expect demand to rise significantly till late 2021. The IEA report came after OPEC lowered its outlook for next year, even after the group’s effort to stabilize prices by cutting production a few months ago.

Why should I care?

For markets: Green energy plan is also a threat

• Not just lower demand, big oil companies also have to deal with the threat from Biden’s green energy plan.
• However, this effort doesn’t seem to have fazed industry bigshots, who think the ambitious plans are likely to be toned down – if not blocked altogether.

The bigger picture: The economy is also punished

• A lack of demand isn’t just punishing the oil industry: the UK economy is said to be still 10% smaller than it was before the pandemic and its recovery is trailing behind its G7 buddies
• Meanwhile, new lockdown could push the country back into recession.
• The UK’s central bank was prepared: it pumped more money into the economy to keep it from going into freefall.

Content source: Finimize. (2020) Fake News Available at: https://www.finimize.com/wp/news/fake-news/ [Accessed on November 16, 2020]