ConocoPhillips Expects Demand to Rebound
September 25, 2020
ConocoPhillips sees global oil demand returning to 100 million bpd and increasing from there. The company still expects “quite a bit of uncertainty next year” in oil demand due to the coronavirus. ConocoPhillips‘ Senior Vice President, Dominic Macklon, said capital spending in 2021 will be below its original planned 2020 level of $6.6 billion. He said that while US shale output was about 8.2 million bpd at the start of the year, the level will likely fall by 4 million bpd in 2022.
Libya is continuing to increase export and get back to production. Reports have said that the Delta Hellas oil tanker is currently loading its crude cargo from storage tanks at Libya’s Hariga oil terminal. The ship has the capacity to load 1 million barrels of crude oil. A second tanker , the Marlin Shikoku, is expected to dock at the port this evening. This oil comes on the market when OPEC+ was hoping better compliance to quotas would help to balance supply and demand. So, OPEC+ will have to consider extending their quotas for longer or cutting more production as they wait for demand to recover from the pandemic.
The market did rally again yesterday but in reality, it is stuck in a range with very low trading volume which indicates no conviction. The market will continue to bounce around as it looks for any clues that might provide some direction.
US initial unemployment claims came in at 870,000 new clans for the week ending September 18th. This was 20,000 more than economists had expected and bearish for fuel demand. Continuing claims continue to fall as they came in at 12.580 million down from last week’s 12.628 million.
Some energy analysts think despite the fact that no additional stimulus has been done that demand should recover helped by refinery challenges due to Hurricane and Tropical Storms, and the market will get balanced and price will be higher. This is very likely true, and it is just a matter of when, how long it will take for the market to get to this point.