Oil demand in the world market recovers earlier than expected

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Oil demand is recovering earlier than expected and by next year is likely to reach pre-Covid-19 levels of 100 million bpd.

The price of Brent crude oil has fluctuated around the $70 mark per barrel for the past three months.

In July, the average oil price was $75/barrel while the same period last year was $43/barrel. This means that the price of crude oil has increased by 60% in just 1 year.

According to Fitch Ratings, Saudi Arabia will lead the increase in global oil and gas production through 2030.

An Aramco oil facility in Abqaiq, Saudi Arabia. Photo: AFP/VNA.

The kingdom’s output of crude oil, condensate and natural gas liquids is forecast to increase by 2.24 million bpd between 2021 and 2030.

After the sharp fluctuations in oil prices last year and to sustainably recover at current levels around the $70 per barrel mark, the oil industry is awaiting the return of exploration and production investments by international oil corporations.

In the second quarter, ExxonMobil recorded a net profit of $4.7 billion, Chevron $3.1 billion and Shell $3.4 billion.

Despite the increase in net income, international oil corporations announced capital cuts.

For example, ExxonMobil reduced its capital expenditure by $25 billion a year through 2025 – $10 billion down from its pre-pandemic target. Chevron’s 2021 investment capital decreased from 22 billion USD/year to 14 billion USD.

This massive investment cut comes at the same time as environmentalists are increasing pressure on banks to stop funding fossil fuel companies.

The European Bank for Reconstruction and Development (EBRD) stopped investing in oil and gas exploration and production projects as part of a plan to align with the goals of the Paris Agreement on climate change.

In addition, the Asian Development Bank (ADB) also announced that it will no longer finance oil exploration and production projects.

Source: ndh.vn – Translated by fintel.vn