Reuters Summit: Oil demand likely to take at least a year to hit 2019 levels - Gunvor head

By Julia Payne and Dmitry Zhdannikov LONDON (Reuters) - Global demand for oil is running about 5 million to 6 million barrels per day (bpd) below pre-coronavirus crisis levels and OPEC with its allies is likely to prolong its existing cuts, the head of trading house Gunvor said on Monday. Torbjorn Tornqvist, chief executive of Gunvor Group, also told the Reuters Commodity Trading Summit the market would not recover to 2019 levels for at least a year and OPEC with its allies were likely to prolong existing production cuts into the first quarter of 2021.

Reuters November 10, 2020 00:05:10 IST
Reuters Summit: Oil demand likely to take at least a year to hit 2019 levels - Gunvor head

Reuters Summit Oil demand likely to take at least a year to hit 2019 levels  Gunvor head

By Julia Payne and Dmitry Zhdannikov

LONDON (Reuters) - Global demand for oil is running about 5 million to 6 million barrels per day (bpd) below pre- Coronavirus crisis levels and OPEC with its allies is likely to prolong its existing cuts, the head of trading house Gunvor said on Monday.

Torbjorn Tornqvist, chief executive of Gunvor Group, also told the Reuters Commodity Trading Summit the market would not recover to 2019 levels for at least a year and OPEC with its allies were likely to prolong existing production cuts into the first quarter of 2021.

Demand plunged by almost a third and crude prices crashed in April as 4 billion people were placed under some form of lockdown to contain the spread of the novel coronavirus .

A recovery in fuel consumption since June has stalled, however, as major European states lock down to combat a second wave of COVID-19 infections.

On Monday, Pfizer said its experimental COVID-19 vaccine was more than 90% effective based on initial trial results.

"The vaccine will not change the realities on the ground for the next 5-6 months. Demand has still not recovered from 2019. We're going to have to wait at least a year," Tornqvist told the summit.

"We've sold more than half the oil inventories from the spring build up, so another 500 million barrels to go."

Tornqvist said draw rate was modest, probably less than 2 million bpd of crude and products combined, as refineries gradually ramp up in Europe and Asia.

The price crash has helped accelerate a shift to renewable energy as oil companies, seeing their profit drops, rethink strategies and announce large-scale job cuts.

Torqnvist said peak oil has likely been reached in Europe and United States but he does not see a global peak just yet with growth to continue in Asia and some developing economies.

"Oil and renewables will grow parallel. Renewables won't replace oil, that is still a decade ahead," he said.

"Hydrogen could become a commodity but it will take a long time. Increasing hydrogen in our economy in any meaningful way in the next 10 years, that's very aggressive. In 20-30 years, if we get 5% fueled by hydrogen that would be a huge achievement."

Gunvor has pledged to invest 10% of its equity over the next few years into non-CO2 energy sources. Tornqvist said large-scale battery technology and smart grids were a good form of investment.

"Wind and solar will be extremely important. We'll do whatever we can to support that. Investment in wind and solar today is very low if you take off the subsidy so you cannot replace the model we have now but there is potential," he said.

(Reporting by Julia Payne and , David Evans and Marguerita Choy)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

U.S. judge skeptical of Trump bid to halt Biden win in Pennsylvania
World

U.S. judge skeptical of Trump bid to halt Biden win in Pennsylvania

By Jan Wolfe and Brad Heath (Reuters) - A judge on Tuesday appeared skeptical of President Donald Trump's request to block officials from certifying President-elect Joe Biden's victory in Pennsylvania, underscoring the difficulties the Trump campaign has faced in challenging the outcome of the U.S. election

U.S. Republican Senator Loeffler to debate Democratic challenger Warnock in Georgia Dec. 6
World

U.S. Republican Senator Loeffler to debate Democratic challenger Warnock in Georgia Dec. 6

By Susan Cornwell WASHINGTON (Reuters) - U.S. Republican Senator Kelly Loeffler has agreed to debate Democratic challenger Raphael Warnock in December, her spokesman said Tuesday, setting up a face-off in one of a pair of runoff races that will decide control of the Senate.

Record storm Iota batters Central America, leaving floods in its wake
World

Record storm Iota batters Central America, leaving floods in its wake

By Wilmer Lopez PUERTO CABEZAS, Nicaragua (Reuters) - Packing record-breaking winds and unleashing torrential floods, storm Iota hit Central America on Tuesday, causing swollen rivers to burst their banks, flipping roofs onto streets, and killing at least three people. The strongest storm on record to reach Nicaragua, Iota struck the coast late on Monday, bringing winds of nearly 155 miles per hour (249 kph) and flooding villages still reeling from the impact of Hurricane Eta two weeks ago. By midday (1800 GMT), the winds had fallen to 65 mph (105 kph) as Iota weakened to a tropical storm, the U.S.