admin Oil markets are starting to see a recovery as countries worldwide start to ease COVID-19 lockdowns, though long-term peak demand may be permanently eroded, Reuters reports Vitol’s chief executive.
Russell Hardy, CEO of the world’s largest oil trader, stated global oil demand sank by 26-27 million barrels per day (bpd) in April and predicts a year-on-year drop of over 8 million bpd.
“The market is going to flirt with optimism and pessimism for the next two or three weeks,” Hardy stated.
“The mist is becoming a little clearer. It’s a bit easier to see the future, so the market is more able to make an educated guess about what that supply/demand balance looks like. We haven’t had a monster rally. It’s just a statement that the worst is over.”
Recently, Brent oil futures were around $29 a barrel LCOc1, rise from around $20 at the beginning of last week.
More than 4 bn people around the world are under some form of lockdown as the world continues its fight against COVID-19 pandemic. Over the last week however, some U.S. states, several major European, India and some African countries begun easing restrictions.
But Hardy said that the oil industry may never recover fully as humanity gets used to a different behaviour patterns.
“Do we go back to living as we did before? Therefore, has the trajectory for oil demand changed? If we’re all expecting a peak in 2030, 10 million bpd up from here, is that 10 now 5 million bpd?” Hardy stated.
Various oil majors such as BP and Shell have forecasted peak demand from around 2030 to 2040.
Source: Reuters
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