Petroleum Demand in India Remains Strong
November 14, 2022
Crude oil rallied on Friday mainly due to a large drop of 1.7% in the US dollar index, news that China had lifted some COVID-19 restrictions and Russia oil output expected to fall after the EU embargoes and bans starting December 5th.
Baker Hughes reported that oil rigs were up 9 oil rigs putting total oil rigs at 622 and last year at this time, the US had only 454 crude oil rigs online.
Saudi Arabia’s Energy Minister, Price Abdulaziz bin Salman, said OPEC+ will remain cautious on oil production. OPEC+ is set to meet on December 4th to decide whether to cut production again, keep it stable or reverse course and produce more. He said members are looking at that state of the global economy and seeing plenty of “uncertainties”. He said “our theme is being cautious. It’s about being responsible and not losing site of what the market requires. He cited last month’s report from the International Monetary Fund that stated the “worst is yet to come” for many economies.
Several Chinese refiners have asked Saudi Aramco to reduce December-loading crude oil volumes, as fuel demand weakens amid a faltering economy and COVID-19 restrictions. While some see China’s demand softening, others warn that India’s buying is still strong. Petroleum demand in the world’s third-largest oil consumers had been growing faster than anywhere else in 2022, rising by more than 400,000 bpd. That’s equivalent to more than 20% on the total global increase.
US commercial crude oil inventories are 3% below the five-year average. Gasoline inventories are 6% below the five-year average, and distillates are 17% below the five-year average. Propane inventoried are 4% below the five-year average.