India oil products demand to rise further in 4Q: IEA

India's oil products demand is expected to rise strongly in the fourth quarter and grow on the year in 2021 as a recovery from the worst of the Covid-19 slump amplifies seasonal trends, the IEA said today.

Overall Indian oil products demand is expected to increase by 475,000 b/d in October-December from the current quarter, the IEA said in its monthly Oil Market Report.

The agency predicted demand growth of 290,000 b/d on the year to 4.82mn b/d in 2021, although this would still leave demand short of pre-pandemic levels of 4.99mn b/d in 2019. Demand will then increase by another 256,000 b/d to 5.08mn b/d in 2022, it said.

India's consumption of diesel and gasoline rose last month as many states eased lockdowns following a slump in new Covid-19 cases. India is the world's second most-infected country with 30.9mn cases, but new infections slowed to around 37,000 as of 11 July, from over 400,000 a day in early May.

Gasoil and diesel demand rose by 210,000 b/d month-on-month in June, "not completely offsetting the fall registered during May", the IEA said. But gasoline demand was back to levels seen in April, having gained about 140,000 b/d on the month.

Demand for gasoline is estimated to increase by 48,000 b/d from last year to 719,000 b/d in 2021, while diesel demand is forecast to rise by 140,000 b/d to 1.52mn b/d.

Indian refiners have increased crude processing rates in anticipation of a recovery in consumption from this month.

Average driving activity in India was 51pc above a 13 January 2020 baseline as of 11 July, compared to 8pc above the baseline in June, according to Apple mobility data. Average driving activity was 43pc below the same baseline in May.

By Sathya Narayanan