The changes in the oil market are highly dependent on the social, economic, and political environment in the country and world. A article analyzes the quarterly results and expectations of oil demand and supply.
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In general, it confirms that the total energy consumption in the US has declined, although, on a quarter-to-quarter basis, it increased by 8.4 million barrels per day (mbd). In terms of the product, the demand for gasoline fell by 1 mbpd, reflecting the drop in the number of total vehicle miles traveled in the country’s territory. Jet fuel also decreased by 46 percent year on year, which is connected to air travel restrictions as a result of the COVID-19 breakout. At the same time, compared to the US, the Chinese oil market is experiencing a more steady recovery. Year-to-August data demonstrate that the oil demand declined by 6 percent. In Europe, despite its effective lockdown measures, the decrease is estimated at 13 percent in Q3. Finally, India experienced a dramatic decline of 21 percent year on year. Therefore, these regions were affected by the recent events in a different way.
In terms of supply, OPEC and partners continue to exhibit high compliance, which is estimated at 100 percent on average; however, the situation varies in different regions. In China, oil imports have increased by 18 percent, which can be connected to its post-lockdown measures and the typical strategy of large-scale oil purchasing for economic recovery reasons. In Nigeria and Iraq, the largest oil suppliers, there was also a significant increase in compliance. The additional 1.9 mbpd is expected to be added in January of the upcoming year. Even though the oil production is not restored in many regions yet, it is currently estimated at 600 tbpd, compared to 150 tbpd output in September.
To conclude, the statistics show the global decrease in oil demand and supply with slight variations in different regions. However, it is expected that in the majority of countries, such as China, European states, and Arabic oil suppliers, the production and demand will improve during the next year. The forecast for the US suggests that its supply and demand situation can be affected by the upcoming elections. Therefore, these results prove that the oil demand and supply depend on each country’s lockdown measures, political and social situation, and oil-related policies.