Saudi Arabia vowed to reduce oil production by an additional one million bpd in the months of February and March as part of the OPEC+ deal, as the oil producers’ group plans to maintain output during the renewed Covid-19 lockdowns. The Middle East country is reducing oil output by more than what it promised to OPEC+, which is a sign of dwindling oil demand, as the global oil market is bracing for a tight market in the second quarter of 2021.
The oil traders expedited crude oil sales from floating storage last month to meet growing demand in Asia, as refineries in the region ramped up production to meet winter demand. The coronavirus vaccine rollout raised hopes of fuel demand bouncing back this year, pushing Brent’s market into backwardation. The floating storage levels dropped further to around 78 million barrels at the beginning of 2021, the lowest in nine months since the Covid-19 pandemic disrupted the fuel demand.
Ethanol imports to India fell by 64% in October to 17,000t, compared with the same period in 2019 and 63% from September 2020. The domestic inventories also increased during the pandemic induced lockdowns and the activity in the industry did not recover to pre-Covid-19 levels in October, suppressing enthusiasm among buyers and deterring them from pursuing increasing prices. However, purchases from main supplier, the US, recovered to normal levels by end of 2020.