The lubricants market faces a “very gradual” recovery, regardless of the ultimate size of the dip in the economy or the economic modeling scenario, consultants from IHS Markit said during a virtual town hall meeting organized by the Independent Lubricant Manufacturers Association last week.
In the early days of the pandemic, the United States-based consulting firm projected a slide in U.S. lubricant demand of 10 to 15 percent, according to Suzan Jagger, vice president of oil markets and downstream consulting. IHS has since revised its forecast to an average 25 to 30 percent drop below 2019’s demand level.
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“Economies came to a grinding halt starting in mid to late March. We went from an economy that was humming along pretty well in the U.S. to over 30 million people filing for unemployment within a matter of a few weeks,” noted Bob Flanagan, who is consulting director for economics and country risk. “This was exacerbated in some industries by the fact that oil prices collapsed, as well.”