Oil demand is back to 2019 levels and expected to increase, Vitol CEO says

(Bloomberg) – The head of Vitol Group, the world’s largest independent oil trader, said global demand had recovered to pre-2019 pandemic levels and was on the verge of increase even more early next year.

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CEO Russell Hardy has said demand for oil will exceed 2019 levels in the first quarter of 2022. He spoke online at the Reuters Commodities Trading Conference on Tuesday.

Strong demand from the largest oil trader comes on top of bullish sentiments from production major BP Plc, who said demand for crude has returned to around 100 million barrels per day, levels not seen since before. the pandemic.

Rebound in demand for fossil fuels comes as political, corporate and climate change activists meet in Glasgow for COP26 talks to agree on reducing greenhouse gas emissions and the transition to cleaner fuels.

Market supply and demand “are going to be reasonably tight” over the next 12 months and a price spike to $ 100 a barrel is “definitely a possibility,” Hardy said.

Hardy warned that demand has returned even though demand for jet fuel and gasoline in the United States has not yet fully returned to pre-pandemic levels.

The forecasts highlight how much demand for diesel and petrochemicals is driving the recovery of crude oil despite continued weakness in air transport that has decimated demand for jet fuel.

Hardy did not provide a specific figure for oil demand, indicating only that it had returned to levels last seen in 2019.

“We’re now at 2019 levels or so,” Hardy said.

The CEO of Vitol said the oil market will remain tight as OPEC producers currently have between 2 million barrels and 3 million barrels per day of unused production capacity.

U.S. oil production growth will be less than 1 million barrels of oil per day in 2022, Hardy said, highlighting the market tension.

(Updates with comments on demand recovery and chart starting at paragraph 8)

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Felix J. Dixon