The world's biggest oil-producing and oil-exporting company, state oil giant Saudi Aramco, is optimistic about the pace of oil demand recovery in Asia, chief executive Amin Nasser said on Sunday, helping oil prices rise on Monday.
"We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies," Nasser said in a statement following Aramco's Q2 report released over the weekend.
Demand for crude oil in Asia has almost returned to the levels from before the pandemic, Bloomberg quoted Nasser as saying.
At the end of June, Nasser said that the worst in the oil market was over, and noted that he was "very optimistic" for the second half of this year.
In June, global oil demand is somewhere around 90 million barrels per day (bpd), up from 75-80 million bpd in April, Nasser told IHS Markit Vice Chairman Daniel Yergin in an interview for CERAWeek Conversations two months ago.
Saudi Aramco's comments on Sunday about the demand recovery were one of the key reasons for oil prices rising early on Monday, according to analysts.
In another sign of optimism about demand, data from global flight tracking service Flightradar24 showed on Saturday that on Friday, August 7, there were more than 70,000 commercial flights globally for the first time since March 20. Yet, the number of commercial flights was still down 43.6 percent compared to the same Friday in August 2019.
After a drop on Friday, oil prices rose early on Monday, with the U.S. benchmark up more than 2 percent as of 9:47 a.m. EDT. WTI Crude rallied 2.28 percent at $42.21 and Brent Crude was trading above $45-at $45.20, up by 1.76 percent on the day.
By Tsvetana Paraskova for Oilprice.com
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Comments
Moreover, current global oil demand at 96 million barrels a day (mbd) according to my own calculations is only 5 mbd less than 2019. It is underpinned by two major bullish influences. The first is China’s bounce back and the second is the steep decline in US oil production by an estimated 6.3 mbd this year so far as a result of the pandemic compared with a claim by the US Energy Information Administration (EIA) that the decline was only 2 mbd. This loss was totally incurred by the US shale oil industry.
As a result, US oil production will be struggling this year and the following years to even reach 6-7 mbd.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London