Aspects that will impact the oil markets in 2021

in Project HOPE2 years ago

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If we consider a world demand for liquids such as oil and gasoline, it is estimated that this year's demand will reach 96.7 million barrels per day.

Perhaps the subject of debate that involves the relationship and dynamism between oil production and refined products from oil is to be able to reach a balance between the existing oil markets and the refining process, however, this balance may be difficult if they are not able to focus on:

  • Balancing OPEC's production +

  • Development in the vaccination process for covid-19.

  • The existence of a major project for an energy transition.

Let us remember that when the pandemic surfaced last year it impacted as a shock to the demand for oil at that time, the way in which society decided to deal with the pandemic caused the demand to be reduced considerably, however with the hope of the application of vaccines it is estimated that for this year the total demand for oil will exceed 97 million barrels of oil per day, thus achieving an increase of 6.3 million barrels of oil per day in addition to those produced in 2020.

One of the aspects for which expectations are high is related to the oil supply for this year, this is one of the reasons why everyone has their eye on OPEC+ plans for 2021, especially taking into consideration that OPEC+ plans to ease a little the restrictions it has on its member countries that are oil producers to ease the production restriction.

This is a decision that can be seen coming, because if the vaccines have the expected effect, the whole world and its inhabitants will be able to have a lifestyle in which people can go out a little more and socialize as they did before the pandemic, this will cause the demand for oil to increase and at the same time OPEC will have to keep up with such demand, and for this it must relax and loosen the production restriction, which in due time has given good results so that oil can reach a stable price.

Another issue that the current oil production must face this year is the energy transition process, without a doubt the planet can no longer bear the impact of fossil fuels in relation to global warming and climate change, however I believe that oil companies and oil markets will be well prepared to face this challenge, since all the years of experience in this business will be useful to be associated to the new energy forms that are to come.

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The pandemic has hurt oil production.And it is very encouraging to learn that they are going to ease the measures to facilitate oil production to be boosted.

This is a very motivating aspect and we hope that little by little it is a correct decision so that everything returns to normal and we regain the stability that we had previously.

That's right my friend, everything announces that soon we can regain confidence in the economic stability we had before the pandemic. Greetings and thanks for your contribution.

When this happens, it will be something like the cork of a champagne when it is opened, a period of excesses in which energy is paramount, an unusual consumption of petroleum derivatives, such as fuel or oils for vehicles, and a growing demand for other less traditional products. People will feel like goats that have been released from a pen and electricity consumption will exceed the highest in history. All oil-producing countries are rubbing their hands together waiting for this boom and trying to ensure that over-demand does not cause prices to plummet.

Hello friend @joseph1956

Certainly let's hope that excesses in energy consumption do not appear after the global health system is stabilized, in the end what you want is a balance that makes the global economic ecosystem to stabilize. Greetings and thank you for your contribution.

Hello dear professor @carlos84

I sense that the last two elements you raise, such as the development of the vaccination process for covid-19 on a global scale and the existence of a major energy transition project, are the main ingredients that will impact the oil market.

Greetings, be well.

Hello my dear friend @lupafilotaxia.

Certainly I think like you, in the sense that mass vaccination against covid-19 will give enough confidence for society to begin to mobilize as before, as there is this dynamism may be that the demand for oil and prices manage to stabilize upwards.

An energy transition in particular I think that it will not immediately affect oil prices to fall, however this transition process is very necessary because we need other sources of clean energy for the environment that can meet the demand worldwide.

Greetings @carlos84, certainly the oil market suffered a strong impact as a result of the pandemic forcing OPEC to take measures to prevent the sliding of the price of this hydrocarbon, now with the emergence of the vaccine the market projects a rise in production even greater than that of 2020, if this materializes the oil dependent economies will take a breath and begin to leave the economic recession that the pandemic gender. This is where a call for reflection is made to each country that depends on oil not to be mono-dependent but to diversify their economies to face situations like these.
Excellent article.

Hello my dear friend professor.

You have touched on a very important point, and that is the dependence on oil production in oil producing countries, and it is important to have an alternative economy for when oil prices are disrupted as has happened in this time due to the pandemic of the corona virus.

Greetings my friend and thank you for your contribution.