• OPEC: The demand for aviation fuel is still weak .. the delay in the recovery negatively affects the oil market


    ​Osama Suleiman from Vienna​

    The Organization of Petroleum Exporting Countries (OPEC) said that the demand for aviation fuel is still weak, as the delay in the recovery in the aviation sector due to the Corona pandemic leads to an immediate negative impact on the oil markets.
    A recent OPEC report indicated that the total share of oil demand in the aviation sector declined from 24 percent in 2019 to about 8 percent of the total oil demand growth for this year.​
    The report pointed out that the average demand for aviation fuel last year amounted to 7 million barrels per day, and the share of the Organization for Economic Cooperation and Development reached 59 percent, or 4.1 million barrels per day, of the volume of demand, while the share of non-OECD countries reached 2.9 million barrels per day.
    The report indicated that the picture is completely different this year 2020, where the demand for OECD countries for aviation fuel is reduced by approximately 43 percent compared to 2019 and 41 percent in non-OECD countries.
    On the other hand, receding fears of US hurricanes caused a decline in crude oil prices at the end of the week’s trading, but Brent and US crude maintained weekly gains of about 1.5 percent and US crude gains for the fourth week in a row.​
    Hurricane "Laura" crossed Louisiana and Texas without extensive damage, as companies gradually return to normal work, while rapid cases of the Coronavirus in the United States are still pressing strongly for a recovery in demand, especially for fuel.
    In this context, Platts International Oil Information Agency reported that the five oil refineries in Texas that were closed before Hurricane Laura are all planning to restart soon, although the two main refineries near Lake Charles in Louisiana are expected to take much longer as they deal with Large-scale production disruptions and possibly more serious damage due to storms.

    A recent agency report said that the storm had only a slight impact on the Beaumont and Port Arthur refinery complexes in Texas near Louisiana and that they are all preparing to restart, anticipating a similar schedule with the Motiva Port Arthur refinery, while the Chevron Pasadena refinery is already preparing to restart.
    He pointed out that Hurricane Laura inflicted massive damage on hundreds of thousands of people who were isolated without electricity. Wind and rain also caused heavy losses throughout the region, and more than 2.3 million barrels per day of refining capacity were cut off before Hurricane Laura made landfall.
    He noted that facility assessments are underway in all affected sites and are likely to take several days, noting that companies will largely rely on schedules to resume operation after assessing impacts and access to electricity and other facilities in the region​.
    The report highlighted the statements of Dan Brouillette, the US Secretary of Energy, who confirmed that he is very happy with the initial damage reports that appeared "relatively light" to the refineries and other energy infrastructure, noting that there are about 20,000 attendant workers from 27 states deployed to Louisiana to help restore the situation. Natural energy very quickly. ​​
    The report quoted ExxonMobil as confirming the need for only minor repairs, as activities have already begun to resume, as the timing of a full return will depend to a large extent on the availability of energy and infrastructure to transport products and the reopening of the Sabine Nex waterway.
    He pointed to the assertion of some company officials that the storm caused clear damage to the refineries and the continuation of the next evaluation phase with the restart of the facilities and the start of preparations for the safe and controlled restart of the refineries.​

    On the other hand, the International Oil Price report stated that West Texas Intermediate and Brent crude were stuck in a familiar area between $ 42 and $ 45 and that the energy industry in the Gulf of Mexico largely avoided Hurricane Laura, as the concentration of energy assets along the coast of Texas and Louisiana led To avert the worst-case scenario from Hurricane Laura.
    The report pointed to the assertion by analysts at Price Futures Group that the damage is not as bad as expected, which creates further selling pressure along with the energy complex, with the closure of more than 80 percent of oil production in the Gulf of Mexico and nearly three million barrels per day. Of refining capacity before the storm and most of it should be back up and running fairly quickly.
    He pointed out that Hurricane Laura closed some LNG operations. Gas exports this week decreased to about 2.1 billion cubic feet, the lowest level since February 2019, and oil exports decreased by about one million barrels per day this week.​
    The report quoted the company "Baker Hughes" as confirming that the number of oil platforms in the United States decreased by 3 to 180 after rising last week for the first time since January, indicating that the total number of active oil and gas platforms remained stable throughout the week with the decrease in the number of oil platforms. By 3 and increasing the number of gas platforms by 3.
    He pointed out that the total oil and gas platforms in the United States have now decreased by 650 compared to this time last year, with the Energy Information Administration's estimates of oil production in the United States remaining unchanged at 10.8 million barrels of oil per day, as oil production in the United States is now reduced by an amount. 2.3 million barrels per day, from an all-time high earlier this year​.

    The report indicated that the total number of rigs in Canada decreased by two this week after an increase of two last week, pointing out that oil and gas rigs in Canada are currently working through 54 active platforms, explaining that oil and gas rigs in Canada are currently 96 on an annual basis.
    On the other hand, regarding prices at the end of last week, oil prices fell yesterday after Hurricane Laura swept the heart of the oil industry in the United States in Louisiana and Texas without causing widespread damage, so companies began to resume activities.
    Brent crude for October delivery fell four cents, to settle the settlement price at $ 45.05 a barrel on the day of the contract’s term, and US West Texas Intermediate crude fell seven cents to $ 42.97.
    The Crude achieved weekly gains of 1.5 percent and West Texas rose for the fourth consecutive week. The two crudes reached a peak of five months during the week as US producers curtailed crude production before the Laura hit, at rates close to levels that accompanied Hurricane Katrina in 2005.
    Jim Ritterbusch, president of Ritterbusch & Co. said, "Oil trading was marked by strong gains over the weekend with a large amount of the storm's price premium being pumped into the market prior to Hurricane Laura, and then followed by a major wiping out of the hurricane's bonus following the storm's arrival as it appeared that the impact was limited on production. Marine crude and refineries activity. "
    Eugen Weinberg, an analyst at Commerzbank, said that the market is stuck in an unusually long range of limited fluctuations, and in a contradictory performance with stock markets until the dollar’s ​​decline did not interact with it. There is no pulse in either direction. Like this, especially in light of the volatile situation on the supply and demand levels."

    The Hurricane Laura, which lowered its level to a tropical depression, struck early last Thursday, Louisiana, with winds of 240 kilometers per hour, destroying buildings, falling trees, and cutting electricity to more than 650,000 people in Louisiana and Texas, but the refineries did not experience huge torrents.​

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