The IEA published its flagship Oil Market Report on a monthly basis. They had recently updated and published its July report and since we started covering the Oil Market as early as last year, we felt that it is time to have another look at the Oil market for this year. A review of oil market at mid-year would be more accurate rather than at the start of the year, as it would typically had incorporated some elements that happened in earlier part of the year for near-future forecast till at least end of the year.

Global oil supply

The IEA calculated that global oil supply fell by 2.4 mb/d (million barrels per day) in June to a nine-year low of 86.9 mb/d. An OPEC+ deal saw the world oil output cut by nearly 14 mb/d since April. If the deal stayed on, the global oil output could decline by 7.1 mb/d in 2020 before recovering by 1.7 mb/d in 2021.

Global oil demand

Global oil demand fell by 16.4 mb/d year-on-year in 2Q2020 due to Covid-19 pandemic. World oil demand is forecasted to decline by 7.9 mb/d in 2020 only to recover by 5.3 mb/d in 2021.

Refinery

Global refinery throughput is forecasted to fall by 6.4 mb/d in 2020 on sharply reduced demands for fuels to 75.1 mb/d only to increase by 4.7 mb/d in 2021

Oil Stock

OECD oil in stock rose by 81.7 mb to 3216 mb in May. Floating storage of crude oil fell by 34.9 mb to 176.4 mb. A tightening crude market balance and a flatter forward price curves reduced the incentive to store oil.

Crude Oil Price

Benchmark crude oil prices had seen price swinging from a high USD 60 per bbl down to a low USD 20 per bbl. More recently, price had stabilised somewhere around USD 35 to USD 45 per barrel. Crude oil prices will be dependent on how swift the world’s demand and economy recovered with covid 19 pandemic still in the background. IEA estimated that the global oil demand will average around 92.1 mb/d down by 7.9 mb/d a year earlier and that the demand will rise to 97.4 mb/d in 2021.

The oil market certainly looks uncertain way forward due to covid 19 pandemic which had dampened international trade, mobility and economic activities worldwide. How fast or slow the world economies recover will play a large part in determining the global oil demand and supply.

escveritasEnergyGlobalOil & GasPetrochemicalsglobal,IEA,market,oilThe IEA published its flagship Oil Market Report on a monthly basis. They had recently updated and published its July report and since we started covering the Oil Market as early as last year, we felt that it is time to have another look at the Oil market for...