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Global crude oil consumption to return to pre-pandemic levels by Q1 2022

June 28/2021

MOSCOW (MRC) -- Global oil consumption is set to return to pre-pandemic levels by the first quarter of 2022, driven by a strong expansion in global manufacturing and freight transport as well as the gradual re-opening of major economies, reported Reuters.

Booming consumption from miners, manufacturers, shipping and trucking firms, as well as private motorists, is expected to offset the continued loss of jet fuel consumption from quarantine restrictions on passenger aviation.

Global liquids consumption (including biofuels) is forecast to reach 100.6 million barrels per day (bpd) in March 2022, according to the US Energy Information Administration (EIA).

For the first time since the onset of the epidemic, consumption will surpass the level for the corresponding month in 2019.

Global consumption will have bounced back in less than two years, after falling by almost 20% or 20 million bpd at the worst point of the epidemic and lockdowns in April 2020. The remarkable recovery in economic activity and oil consumption is mostly the result of a rapid deployment of effective vaccines in Europe and North America and strict quarantine controls in China and other parts of Asia.

In wealthier economies, ultra-low interest rates, unprecedented government spending, and generous support for businesses and households have also helped heal the oil market far quicker than seemed likely at the height of the epidemic.

But in the five years before the coronavirus, global consumption was growing at an annual rate of just over 1% or a little over 1 million b/d per year. Even after the expected strong rebound, global consumption is still expected to be more than 2% or 2 million b/d below its pre-epidemic trend at the end of 2022.

The gap between forecast and pre-epidemic trend consumption is an indication of the long-term scarring caused by the coronavirus and associated infection controls.

We remind that as MRC wrote before, Formosa Plastics USA, part of Formosa Petrochemical, began restarting its No. 3 cracker in Point Comfort, Texas on June 23 and was expected to ramp up through last week. The Formosa OL3 cracker with the capacity of 1.25 mln tonnes of ethylene per year was shut on June 4, 2021, owing to technical issues.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
Author:Margaret Volkova
Tags:Europe, North America, crude and gaz condensate, propylene, ethylene, medicine, petrochemistry, USA.
Category:General News
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