Oil, what the market will look like in 2021
Rystad Energy expects a broadly balanced oil market in January, with supply and demand oscillating between 77.7 and 77.8 million barrels per day.
The demand for oil and condensates in 2020 was heavily affected by the effects of the Covid 19 pandemic, producing, among other things, huge surpluses in supply and inventories. This prompted producers to cut oil production to try to keep prices high. However, according to what emerges from the latest analysis by Rystad Energy , 2021 could offer producers a window of opportunity. While the supply of oil and condensates will still exceed demand in the first quarter of 2021, Rystad Energy expects the vaccination campaign to help promote a rapid economic recovery. And so the monthly supply deficit should begin to recede gradually, reaching a peak of around 3.4 million barrels per day in August.
MARKET BALANCED IN THE FIRST PART OF 2021
Going into the details of the analysis, Rystad Energy expects a broadly balanced oil market in January, with supply and demand fluctuating between 77.7 and 77.8 million barrels per day. The effect of global lockdowns will be felt even more in February and March as demand will not follow the growing supply and will remain limited to 77.9 million b / d and 77.4 million b / d respectively, creating a surplus of 0.5 million b / d in February and 1.4 million b / d in March. There will also be a smaller surplus in April, but the market will recover shortly thereafter, admits Rystad Energy. Which bases its analysis on a scenario that sees the terms of the latest OPEC + agreement remain unchanged even after January.
VERY DEPENDS ON OPEC +
“We also assume compliance within OPEC + in the future, as well as a limited increase in US supply and Iranian barrels only returning in 2022. However, with balances entering a period of acute deficit as early as the second quarter by 2021, an upward revision to the offer could be around the corner, ”admitted Rystad Energy.
ACTIVITIES HAVE RESTARTED IN THE USA. TONHAUGEN: SHALE IS A MONSTER THAT YOU CAN SLOW DOWN, BUT NOT KILL
“The monitoring in the United States is starting to indicate stronger activity. As we have already warned our customers, shale is a monster that you can slow down, but you cannot kill. Also, there are winds of change expected in geopolitics next year, ”said Bjornar Tonhaugen, head of oil markets at Rystad Energy.
THE CHANGE TO THE WHITE HOUSE AND THE IRAN NODE
Another novelty that could change the forecasts is given by the change of administration in the United States: the new president Joe Biden could in fact change policy towards Iran either by removing the sanctions or with an increase in imports from the country by China and India, with a view to a thaw in relations, underlined Rystad Energy.
“There is always room to deviate from projections, especially in such a volatile environment as policies can change. The upcoming deficits will create further room for OPEC + to increase production from May 21st compared to our base case, which in turn can affect the monthly balances. OPEC + production, as usual, will have to fight for market share with US shale, which is currently turning the page thanks to increased activity, ”concluded Rystad Energy.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/petrolio-come-sara-il-mercato-nel-2021/ on Sun, 03 Jan 2021 07:28:19 +0000.