Oil Demand to Return to Pre-crisis Levels in Q2 2021

Oil rig at late evening

The chief executive of Russian oil producer Gazprom Neft said he expects global oil consumption to return to pre-crisis level. That should be in the second half of 2021, a bit later than the energy ministry’s forecast for Q2.

CEO Alexander Dyukov said the current oil prices of above $40 per barrel are comfortable. And that’s both for the company and the federal budget. 

This was a statement at an energy commodities conference on Wednesday. It was also the first large-scale industry event since Russia scrapped public events in March.

Dyukov said the pandemic hasn’t gone anywhere, but they are sure that there won’t be such a harsh reaction. First of all in Europe, to the pandemic, there won’t be harsh quarantines, he said.

Furthermore, he said, this will allow the market to balance. In the second half of next year, they hope they’ll be able to return to the consumption volumes of 2019.

In commodity news on Thursday, Russian Energy Minister Alexander Novak said he expected global oil demand to recover. He said he expects it to recover fully in the second quarter of 2021.

The Paris-based International Energy Agency has cut its forecast for global oil demand for 2020. This was for the second time in two months last week due to the faltering recovery.

The energy watchdog forecast global consumption of petroleum and liquid fuels will average 91.7M bpd for all of 2020. This is a reduction in its previous forecast of 200,000 bpd. Moreover, this is down 8.4M bpd from 2019’s 100.1M bpd level.

Dyukov said that the company is doing everything possible to keep up investment. This is despite global demand for oil slowing because of the coronavirus pandemic.

Gold Falls on Stronger Dollar

Meanwhile in precious metals, gold was up on Wednesday in Asia after a rise in the dollar. The USD was supported by a strong U.S. housing market, against an increasing number of COVID-19 cases globally.

Gold futures fell 1.01% at $1,888.04 by 12:46 PM ET (4:46 AM GMT).

On Wednesday, the latest housing market figures from the U.S. gave the dollar a boost. Sales passed the 6 million mark, the highest number in 14 years. 

The U.S. House of Representatives has passed a bill to maintain government spending ahead of a shutdown. This has brought positive news for the dollar but to gold’s loss.

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