The head of Saudi Aramco’s trading arm said, The Organisation of the Petroleum Exporting Countries, OPEC, and its allies will have to take on with “lot of demand issues” before raising production in January 2021.
They plan to raise production by 2 million barrels per day (bpd) from January after COVID pandemic hits demand down. The overall reduction was to about 5.7 million bpd.
“We see stress in refining margins and see a lot of refineries either cutting their refining capacity to 50-60% or a lot of refining closing,” said by Ibrahim Al-Buainain.
He also stated that the refining business may not sustain at these rates. While the economy of world is negative, Chinese oil demand is likely to remain strong and its economy grows.
Other OPEC members and allies are complicating efforts to curb output. Libyan production is expected to rise to 1 million bpd in coming weeks. In the meanwhile, oil prices slumped over 4% due to increase in COVID Infections and renewed lockdown in the US and Europe.
Crude oil
“Crude oil is under pressure from the increase in COVID-19 cases, especially in Europe,” said Robert Yawger, director of energy futures at Mizhuo in New York.
US West Texas Intermediate crude fell $2.05 to $37.52, while Brent futures fell $1.91 to $39.29 a barrel. Futures trimmed the losses after US Energy Information Administration (EIA) said 4.3 barrels of crude oil was put into storage but the data showed a barrel build of 4.6 million.
However, crude production increased to its peaks since July at 11.1 million barrels per day in a weekly build of 1.2 million bpd, shown in data.
The demand for Gasoline has been weak overall, 10% down from the four-week average a year ago. The consumption in US is recovering slowly as millions of people have restricted leisure travel due to COVID cases spreading worldwide.
