Tag: United States

Opinion Piece: How Will OPEC+ Respond?

There is no denying global oil demand is on the rebound, and unfortunately it may be slowed by a new round of lockdowns gripping the United States and Europe from a second wave of the global pandemic. Even though many countries in the OPEC+ group rely on oil revenues to support their national economies, RARE PETRO anticipates they will most likely continue overall production cuts instead of boosting output in January. Regardless of whether or not the current production cuts of 7.7 MMBPD are extended, any move by OPEC+ to keep cuts above 5.8 MMBPD beyond January should be received favorably by the market and may give oil prices additional upward momentum.

Global Refining Capacity

The global refining landscape has been changing over the past decade, but the rapid demand destruction associated with the global pandemic has flipped the sector on its head. Many refineries in the U.S. and around the world have been changing their refined products or closing entirely. Luckily the wave of closures in the United States and Europe does not signal an end to global refining, but more of a shift in output priority and refining location. Companies and countries are moving away from refineries only designed to make gasoline and diesel, favoring those with the additional capability to refine crude into petrochemicals and plastics.

Post-Crisis Recovery: Oil Supply and Demand is Moving Back Towards Equilibrium with China Leading the Way

The dual black swan events of 2020 have thrown supply and demand far out of equilibrium but with China purchasing crude again and various parts of the United States starting to open back up, global oil demand is beginning to return. As the world begins to recover to pre-pandemic levels, market forces will support the shift back towards equilibrium just like the shift we are currently seeing in China.