BAKU, Azerbaijan, Aug.4
By Leman Zeynalova – Trend:
Gas markets are likely to remain materially oversupplied, Trend reports with reference to BP.
BP said in its report on the second quarter of 2020 that the ongoing severe impacts of the COVID-19 pandemic continue to create a volatile and challenging trading environment.
“Looking ahead, the outlook for commodity prices and product demand remains challenging and uncertain. Global GDP is expected to contract this year by 4-5 percent. Global oil demand is expected to be around 8-9 million barrels of oil per day lower than 2019, with OECD oil stocks above their five-year range, and gas markets are likely to remain materially oversupplied,” said the company.
The company believes there is also a risk of the pandemic having an enduring impact on the global economy, with the potential for weaker demand for energy for a sustained period.
BP said that in July, refining margins remained under pressure, with RMM at $6.3/barrel due to lower product demand and high inventories, while BP refining utilization improved to above 80 percent.
“Retail fuel demand recovered in July to 10-15 percent lower than a year earlier, however, aviation fuel demand continued to be over 70 percent lower. The pandemic is not expected to result in Upstream oil and gas outages but has impacted development of the Mad Dog 2, Tangguh Expansion, Trinidad Cassia Compression and Greater Tortue Ahmeyin Phase 1 major projects,” the report said.
BP expects its future financial performance, including cash flows, net debt and gearing, will be impacted by the extent and duration of the current market conditions and the effectiveness of the actions that it and others take, including its financial interventions.
“It is difficult to predict when current supply and demand imbalances will be resolved and what the ultimate impact of COVID-19 will be,” the company said.
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