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NEW DELHI : India's fuel consumption could rise by 9.8% in the year to March 2022, its highest pace of growth in six years, driven by robust demand for gasoline and gasoil in Asia's third largest economy, according to initial government projections.
"The recent breakthrough on a Covid-19 vaccine is a hope for the swift recovery of global energy demand next year. HSBC Bank analyst Gordon Gray recently stated-"The recent news around Covid-19 vaccines has boosted crude prices as markets start to look to a return to some sort of normality in 2021, also we expect OPEC+ to err on the side of caution as it evaluates how the market evolves.”
OPEC+ might decide to postpone a 2 million barrel-a-day production increase which was scheduled for January. The final decision for the same won't be made until the complete wrap-up of the OPEC+ meeting, scheduled from Nov 30 to Dec 1. While addressing the conference Prince Abdulaziz said - "Vaccine development was good news but was counterbalanced by a surge in cases in the second wave of infections and there is still a long way to go".
Equinor expects the global oil demand to peak 2 years prior to what it has stated earlier i.e 2030 as a repercussion of the COVID-19 pandemic. Equinor is forecasting that by around 2025 the oil demand will be returning to the pre-pandemic level of 100 million bpd and will fall to 88 million bpd in 2050 as far as the current scenarios are concerned.
With ease in restrictions, India saw a rise in fuel demand in September since June. Among all the oil commodities the consumption of diesel, a key link to economic growth, saw a sharp rise of 13.2% since the last few months. Petrol demand also saw an increment by 2.9% and LPG by 5.7% since August.The demand was low in August but with relieving restrictions it might recover in the coming months.
On Friday, oil prices went down due to weak demand and supply pressure on the market. Brent slipped by 1.7%, to $26.03 a barrel. WTI decreased by 2.4%, to $18.38 a barrel. “Crude demand is likely to disappoint even if the more optimistic demand recovery forecasts for end-user consumption materialise, due to the high inventory pressure that has built over the last month or so”, said JBC Energy.
Data released by the Indian oil ministry (PPAC) reveals that the country’s fuel demand jumped by 3.3% in July, compared with the corresponding month last year. The consumption of fuel which is an established parameter for oil demand, computed to 17.58 million tonnes. While gasoline sale was 8.8% higher from a year earlier at 2.52 million tonnes, LPG sales improved 9% to 2.22 million tonnes.
Stalling demand and escalating fears of global economic concerns due to trade war weighed down the oil prices on Monday. Prices declined by more than 1% extending 3% loss from Friday. WTI went down by 1.2%, at $52.88 per barrel. Brent crude fell by 1.3% and was traded at $61.16 a barrel. Analysts warned about oil's vulnerability and added that “geopolitical risks remain in place” due to weakening demand.
With the troubled demand side of the crude market due to the increased Sino-US trade war, the oil prices fell down on Tuesday. The supply concerns of the market tried to provide a ground to the prices, which helped a little. Brent futures went down by 0.35% and was traded at $77.78 per barrel, while WTI decreased by 0.46% and was traded at $68.59 per barrel.
According to WoodMackenzie, by 2035, India will account for a third of global demand growth, a surge of 3.5 million bpd. Although, Aramco will build a 1.2 million bpd refinery in Mumbai, but according to WoodMac it won’t be sufficient. The survey hints that it could lead to gas imports from Europe and US. Research director said that the need of new refineries depends on oil demand growth and private refiners.
Equinor has warned about the slow pace of transition to a low-carbon economy. The company’s chief economist insisted on swift, global and coordinated political action to drive changes in consumer behavior and to shift investments towards low carbon technologies. Equinor believes that Paris Agreement goals are achievable, but anymore delay in the actions will make it very hard to reach them. Paris Agreement caps the global rise in temperature below 2oC.