Drilling contractor Seadrill may retire more drilling rigs as the Covid-19 pandemic has triggered a reduction in offshore operations and fuel demand. This trend is expected to continue late into next year with no sign of demand revival in the future and a lack of clarity regarding worldwide economic recovery.
China is expected to surpass the US as the largest oil refiner by early 2021, according to the International Energy Agency. The US has been the largest oil refiner in the world for more than six decades. The coronavirus pandemic accelerated a shift in the refining industry with an increase in demand for plastics and fuels across Asia, thanks to the recovery of Asian economies. The US and Europe, however, are moving away from fossil fuels leading to a decline in the oil demand outlook.
US energy firms reduced the number of operating oil and gas rigs for the first time in more than three months, though the number of operating rigs remains higher than August. The ongoing pandemic has cast a shadow over the country’s oil sector, slumping the fuel demand by roughly 12% in 2020, which has pushed operators to reduce drilling operations to cut losses. However, operators have increased rigs recently to exploit the decreased cost for drilling staff.