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LONDON (Bloomberg) --The International Energy Agency cut forecasts for global oil demand as air travel suffers from the coronavirus crisis even more than previously expected.

The IEA reduced estimates for almost every quarter through to the end of 2021, with the second half of this year taking the steepest downgrades. Air travel remained two-thirds lower than last year in July, normally a peak month because of holiday flying, it said in a monthly report.

“The outlook for jet fuel demand has worsened in recent weeks as the coronavirus has spread more widely,” said the Paris-based agency, which advises most major economies on energy policy.

Second-Half Hit

At the same time, global crude supplies increased last month as Saudi Arabia phased out some of the steepest production cuts it’s been making to offset the demand loss, and as improving prices helped the U.S. and Canada revive some operations.

Despite the downgrades, world markets should tighten during the rest of the year as consumption recovers from the depths of the pandemic, while Saudi Arabia and other OPEC nations keep output in check, the IEA said. International crude prices climbed to a five-month high above $45 a barrel in London this week.

The agency cut global demand estimates for the last two quarters of this year by 500,000 barrels a day, projecting that consumption will average 95.25 million barrels a day in the period.

The second-half forecast for jet fuel and kerosene was cut by 380,000 barrels a day, putting demand on track to fall 3.1 million barrels a day this year to 4.8 million a day.

The IEA also boosted projections for supplies outside the Organization of Petroleum Exporting Countries in the second half by about 500,000 barrels a day, as the U.S. and Canada restore halted production.

As a result, the market won’t tighten during the rest of the year as sharply as anticipated, but it will still tighten.

Demand has been above supply since June, and as OPEC and its partners press on with output curbs, world inventories ought to deplete at a rate of about 4 million barrels a day in the last four months of the year. That should pare some of the gigantic stockpile surplus that built up in the first half.