The International Energy Agency (IEA) reported on Tuesday that it cut its forecast for the growth in oil demand in 2020. The entity mentions a "treacherous" path ahead amid weakening market confidence and an increase in the number of coronavirus cases reported worldwide.

In its monthly report, the IEA reduced its outlook for growth in world oil demand to 91.7 million barrels per day (bpd). This represents a contraction of 8.4 million barrels per day, year on year, more than the contraction of 8.1 million barrels per day foreseen in the August report.

Oil prices dropped by approximately 65% in the first quarter and, in April, WTI futures contracts reached the unprecedented situation of operating at negative prices. Then, a recovery causes the commodity to now mark a devaluation close to 35% in the year 2020. But the IEA points out that the recovery is increasingly difficult now.

"We expect the recovery in oil demand to slow down sharply in the second half of 2020, with most of the gains already achieved," said the IEA. "The economic slowdown will take months to completely reverse, while certain sectors, such as aviation, are unlikely to return to pre-pandemic consumption levels, even next year."