Optimism Builds Around Chinese Fuel Demand
February 1, 2021
The market was optimistic about rising China fuel demand after the world’s largest importer of oil reported data showed a 3% rise in 2020 of refinery output. This was a record high.
One executive order from President Biden featured the cancellation of the presidential permit for the Keystone XL pipeline project. The Keystone XL project was expected to supply a significant amount of crude oil from the Canada tar sands to the lower US refineries. Rail transportation is too costly and dangerous.
From Bloomberg: The chief executive officers of Exxon Mobil Corp. and Chevron Corp. spoke about combining the two largest US oil companies last year, Dow Jones reported. The talks were preliminary and are not ongoing according to the report. The news kicks off what is going to be a very busy week for the oil market, with almost every major reporting results. OPEC and its allies will review their December agreement on Tuesday, after a preliminary report estimated 99% compliance with output levels.
According to S&P Global Platts Analytics, global oil demand will increase by more than 6 million barrels per day in 2021 and return to 2019 levels a year later despite the increase in COVIV-19 infections and new lockdowns which cut energy demand from the end of last year. Oil demand is expected to average 99.3 million barrel pe day this years following a fall of 8.8 million barrels per day in 2020. The 2021 forecast is a 280,000 barrels per day downward revision to it previous estimates.
In the Baker Hughes Rig Count oil rigs were up 6 to a total of 295 oil rigs and last year at this time there were 675 rigs.