Foggy fuel demand is falling in oil

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Fog of fuel demand is falling in oil, today Saturday 18 July 2020 01:10 in the morning

Source:

  • London – Reuters

History: July 18, 2020

Oil prices fell yesterday, as trading was characterized by growing uncertainty about the global recovery in demand for fuel, while cases of “Covid-19” are rising in several countries, with major producers preparing to ease restrictions on production.

Brent crude futures fell 11 cents, or 0.3%, to $ 43.26 a barrel during trading, and US West Texas Intermediate crude fell 4 cents, or 0.1%, to $ 40.71.

Supply cuts

The benchmarks fell 1% the day before yesterday after the Organization of Petroleum Exporting Countries (OPEC) and its allies agreed, in what is known as “OPEC +”, to reduce the supply cuts of 9.7 million barrels per day, which were applied earlier this year by two million barrels per day as of August.

But Vivek Dahar, commodity analyst at the Commonwealth Bank of Australia, said that the actual increase in production will be close to one million barrels per day, as countries like Iraq, whose production increased compared to their pledges to cut supplies in May to July, agreed to implement a larger cut in August and September.

Dahar said that the market has received some support from agreeing to some compensation for the previous non-compliance with the pledges while the uncertainty about the growth of demand is growing.

China consumption

To that, the National Energy Administration reported that China’s consumption of refined oil products increased in the second quarter as the demand of the industrial and transportation sectors improved after exceeding the peak of the Corona virus pandemic, but the demand is still below the levels recorded a year ago.

On Friday, the National Energy Administration said that after demand decreased by about 19% in the first quarter compared to the same period in 2019, “in the second quarter, the contraction diminished by six percentage points.”

The administration did not provide details of the consumption of refined oil products in a press briefing in the capital, in which it revealed the percentage change.

Since April, China has gradually loosened restrictions on travel within the country, resumed industrial production and increased investment in infrastructure projects once the peak of the Coruna outbreak was overcome.

“Diesel consumption has started to grow year on year since April and gasoline since June, and fuel demand recovery is expected to continue in the second half of this year,” said Wang Linning, chief analyst at the Research Center of the National Petroleum Corporation of China.

Coved 19 injuries

The rising incidence of new Corona virus slows the recovery of fuel consumption after the easing of general isolation measures in the United States and other countries, raising fears that recovery of consumption from the impact of the pandemic may take years. The United States announced yesterday, at least, 75 thousand new cases of (Covid 19).

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