The oil refiners across Asia and North America are permanently shutting down their operations with Europe expected to follow suit as recovery prospects look bleak after the coronavirus pandemic led to decline in oil consumption. The global fuel demand slumped by 30% in the initial days of the pandemic triggering refiners to suspend operations. With travel restrictions expected to continue, oil consumption is unlikely to return to pre-Covid-19 levels in the near future.
The prospects of a coronavirus vaccine triggered optimism among oil traders that demand for the fuel will recover next year. The price of Headline Brent oil futures rose 15% to more than $45 per barrel on Wednesday. However, the oil supplies in January will not be impacted by the potential vaccine as the coronavirus immunisation programme is expected to be rolled out over a period of time.
The oil demand worldwide will take more time to recover than expected as the coronavirus cases are re-rising globally, thwarting OPEC and its allies’ efforts to stabilise the international market. The demand is projected to reach 96.26 million bpd in 2021, going up by 6.25 million bpd in 2021. The growth prediction, however, is 300,000 bpd lower than October figures. The lower demand could support OPEC+ stand on deferring an increase in oil production next year.
Sembcorp Marine’s yards restarted production with almost 100% of its workforce, after the pandemic induced restrictions were eased in Singapore. The company continued to report losses in the third quarter due to implementation delays and lower business capacity. Sembcorp is resuming delayed projects thanks to oil price recovery and is actively pursuing new projects especially in renewables and gas sectors.