Aramco expects demand for oil to rebound to pre-pandemic levels by 2022, as supply tightens, creating a deficit, the chief executive of the energy giant said. Saudi state to Energy Intelligence.
China is once again the center of attention. According to Amin Nasser, it will represent the bulk of the rebound, along with other developing countries in East Asia and other parts of the world.
On the supply side, however, Nasser warned that spending cuts could create a shortage, and it won’t be a short-term deal.
“Yes, there is a concern that we could end up with a tight supply in the medium to long term if this level of investment is not corrected for the future,” the executive told Amena Bakr of Energy Intelligence. The industry has cut spending by about a third from last year’s level.
The talk came out on the same day that OPEC downgraded its oil demand forecast for 2021, now expecting a slower rebound than in previous forecasts, the cartel said in its monthly report on the oil markets.
According to the latest estimates, demand for oil will average 96.84 million bpd next year, down from 80,000 bpd from September. OPEC attributed the revision to the slowing economic recovery among members of the Organization for Economic Co-operation and Development (OECD) as well as in non-OECD countries. Even with the revision, however, the 2021 demand would be 6.5 million bpd higher than that of 2020.
The International Energy Agency is less optimistic. In its latest report on the oil market, the authority said it expected a 5.5 million b / d increase in demand for oil next year, but a higher total than that from OPEC, to 97.2 million. The agency warned, however, that the effect of the pandemic on global oil consumption would be long-term. In this regard, it differs from Nasser’s belief that the worst for the oil industry is now over.
By Irina Slav for OilUSD
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