Oil demand shows signs of weakness | Rigzone

Global oil demand showed signs of weakness in March and this weakness is expected to persist through April and May due to the impact of high oil prices, the negative effects of sanctions and the war in Russia and Ukraine. , and the consequences of the increase in blockages in China.

That’s according to Rystad Energy’s Senior Vice President of Analytics, Claudio Galimberti, who noted that amid weakening demand for oil, the supply of petroleum products remains tight.

“ICE Gasoil-Brent crack in Europe has traded at unprecedented highs of $25-$30 a barrel over the past two weeks, higher than the memorable gasoil crack peak of 2008,” Galimberti said in a market memo from Rystad sent to Rigzone. late Monday.

“Russia currently exports around 800,000 barrels per day of diesel/gasoil to Europe. While Europe imports between 1.6 and 2.0 million barrels per day of diesel/gasoil, an effective ban on petroleum product exports from Russia could further increase the gasoil crack,” Galimberti added.

In the note, Galimberti pointed out that road transport demand weakened throughout March. The Rystad analyst pointed out that this was mainly due to OECD countries and less to China, at least so far, despite news of short-lived Covid-related lockdowns in some provinces over the past two month.

“However, the two-week intermittent lockdown in Shanghai launched on March 27 will be among the largest in China so far this year, due to the size of the population involved (over 25 million people), with the potential to reduce demand by up to 200,000 barrels per day for the duration of the restrictions,” Galimberti said.

“The Shanghai lockdown will give us an indication of the success of China’s zero-Covid policy and whether it will be maintained or abandoned,” Galimberti added.

According to the latest data from the World Health Organization (WHO), confirmed Covid-19 cases in China have fallen for the past three consecutive weeks, reaching 46,962 in the week of March 21. Deaths have fallen for the past two weeks in a row. and stood at 1,453 in the week beginning March 21, according to WHO data.

As of March 28, 6:23 p.m. CEST, there were 480.1 million confirmed cases of Covid-19 worldwide, with 6.1 million deaths, according to the latest WHO figures. As of March 27, a total of 11 billion doses of the vaccine had been administered, according to WHO data.

To contact the author, send an e-mail andreas.exarheas@rigzone.com

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Felix J. Dixon