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Demand for oil could recover in 2021 – Gazprom Neft chief

Photo: Julia Yakimenko / TASS

Demand for oil could recover to 2019 levels as early as the second half of next year, though no one should expect this to happen more quickly, the head of Russian oil major Gazprom Neft said this week.

Alexander Dyukov, chairman of the board of Gazprom Neft, told the Tyumen Oil and Gas Forum that rates of oil consumption had dipped in connection with the onset of a “second wave” of infections linked to the COVID-19 pandemic. But there should be no expectations, he said, of a steep drop.

On the one hand, the fall in demand is not as significant as we had anticipated,” he told the gathering. “Analysts had spoken of a fall of 30-70 million barrels per day, while in fact the decline was 25-30 million bpd. And the market has started to recover quite quickly.

But a rapid rise in consumption was unlikely.

“On the other hand, there has been no confirmation of expectations that by the end of the summer we would no longer feel the effects of the pandemic’s consequences, that demand would recover and that we would find ourselves one-on-one with the realities of world reserves. We are still seeing a slowdown in demand,” he said.

The main factor behind this, he said, was the pandemic’s continued effect, with many countries already tackling a second wave.

We are certain that we will not see any reappearance of the tough quarantine measures and that this will over time allow for a balanced market,” he told participants. “I believe that in the second half of 2021 we will get back to 2019 consumption levels.”

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