World oil demand has grown at a record pace – by 13 million barrels per day (bpd) – in the past four months since the nadir of the COVID-induced collapse in April, IHS Markit reported Tuesday.
Presently at 89 percent of pre-COVID levels, global oil demand has risen from 78 percent in April, the consultancy noted in a written statement emailed to Rigzone. The firm attributes the increase to relaxation of some COVID-19 restrictions. It predicts demand should continue to go up until leveling off at 92 to 95 million bpd through the first quarter of 2021. It pointed out the projection equates to roughly 92 to 95 percent of prior year levels.
The anticipated plateau in demand will stem primarily from subdued air travel and commutes, IHS stated.
“The meteoric rise of world oil demand from the lowest lows of the COVID crash is going to come up just short of a full comeback, at least for now,” remarked Jim Burkhard, IHS Markit’s vice president and head of oil markets. “For demand to fully return, travel – especially air travel and commuting to work – needs to get back to normal. And that won’t happen until there is containment of the virus and effective vaccines.”
IHS Markit also stated the number of air flights globally is approximately 30 percent lower than February levels – a marked improvement from the 78-percent shortfall in April. However, it observed that actual jet fuel consumption remains 50 percent lower than prior-year levels because the number of long-haul flights has not recovered to the extent of short-haul flights.
Gasoline demand in the US has flat-lined. The question is whether demand is driven by consumers burning oil, or whether it is simply countries, like China, buying huge amounts of oil for storage at bargain-basement prices.
I think that markets should balance in 4-6 months. For USA depletion of shale wells have made USA a net importer of oil, new wells and completions of DUCs are way down. World wide rig count is down.
ReplyDeleteIMHO gasoline demand will stay flat EVs are very close to being less costly than a gasoline power vehicle. Tesla model 3 uses 0.25KWH per mile, (under 3 cents/mile in my area) less costly than a mid sized car like a civic at about 6 cents per mile. EV pickups are coming soon. EV big rigs are will be on the road soon.
And now home solar looks to be competitive cost as compared to cost from the grid to my home. $1.49 per watt initial cost.
The Mideast certainly needs better prices. EVs are not yet on my radar scope.
DeleteA reminder: this is not an investment site. From an investing / trading point of view, investing /trading in public EV companies may make a lot of sense for some and some may make a ton of money (some already have, think TSLA). However, when I said EVs are not yet on my radar scope I am referring to market penetration and infrastructure (depth and stability of grid).
DeleteI do not own any EV stocks or trade them. I do not think that global warming is a problem. Just offering my view of long term demand of oil. I do not think that EVs will be a big problem with the grid, my local electric provider is now offering a 2 cent reduction per KWH for EV charging between 10pm to 6am.
DeleteFor commercial EV a long haul truck does not make sense. For a local delivery like a FEDEX delivery it does with a lot of stop an go, braking can puts power back to battery.
I'll be posting more on EVs -- you've piqued my interest.
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