![]() ![]() petroleum demand rose further – to 20.7 mb/d with growth of 5.4% year-on-year (y/y). Before the polar vortex, weekly data through Feb. oil demand of 19.7 million barrels per day (mb/d) that rose to within 1.2% of its level in January 2020 and well within its five-year range by API estimates, which we discussed in this article. A global backdrop that has increasingly appeared to be short of oil would only magnify the impacts of these policies and be felt by the majority of American households.īy the numbers, which appear to be compelling, let’s give some additional context.įirst, 2021 kicked off with U.S. oil demand recovery could put upward pressure on oil prices and require more foreign oil imports that would ripple across the broader economy. Energy Information Administration (EIA ) projects by 2022. oil production to rebound even by the 1.0 mb/d that the U.S. consumers.įrankly, these policies could make it difficult for U.S. It also includes revoking the Keystone XL pipeline permit and concern that the administration will force the shutdown of the Dakota Access Pipeline, which is critical to Bakken oil production that ultimately serves mid-continent U.S. In this context, the Biden administration’s early policies on domestic natural gas and oil could be perilous – including halting new federal natural gas and oil leasing, as well as possible moves on the regulatory front and other actions that could limit drilling or hydraulic fracturing. Global oil drilling activity and capital investments have remained historically weak, suggesting a potential supply gap.Combine that expected decline with projected demand growth, and the world could require more than 14 mb/d of new production by 2022. Additionally, oil production declines naturally and that production must be replaced.Current official global oil demand projections through 2022 call for record, two-year demand growth that could require virtually all of the world’s oil spare production capacity.By all indications, global oil demand exceeded supply and supported prices since the third quarter of 2020. ![]() and global oil demand through mid-February 2021 nearly returned to pre-COVID-19 levels, mainly due to strong refining & petrochemical needs as well as seasonal winter heating fuels demand. petroleum data and analysis, API is able to shed some light on recent developments. An undersupply potentially could put upward pressure on costs, impacting consumers, manufacturers and, generally, any process that utilizes oil.ĪPI’s outlook has maintained that global oil markets would improve in tandem with the economy, but uncertainties remain about the timing and extent to which the U.S. – the world’s oil needs could outpace production in 2022. It’s possible we could be headed for a shortfall in global oil supply as soon as next year – pretty remarkable considering where oil demand was last spring, with economies slowing under the weight of the pandemic.īased on projected rising demand, the natural production decline from existing wells and decreases in drilling activity and industry investment – especially in the U.S. ![]()
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