BAKU, Azerbaijan, Sept.18
By Leman Zeynalova – Trend:
During 2021 the global marketed utilization for floating rigs could dip to 56 percent while global marketed utilization for jackups could see a low of 59 percent, Rystad Energy told Trend.
Many drilling contractors and operators now have measures in place to deal with COVID-19 related logistical challenges, according to the company.
“Consumer demand for oil is not expected to improve significantly until towards the end of 2021. Demand for drilling rigs will be slow to return until the price of oil stabilizes in the range seen towards the end of 2019,” said Rystad Energy.
The company said OPEC showed that it recognizes the unfavorable market developments, acknowledging the risk of oil demand being reduced as a result of rising infections.
“Although no amendments to the current supply-cut deal have been proposed by OPEC+, the producers group gave the impression that it does not sweep troubles under the carpet. Saudi Arabia introduced the possibility to hold an extraordinary meeting in October if the market downturn continues, which has reassured traders that -if needed – OPEC+ may again jump to the task to balance the market and save prices.
“Feeling OPEC+ has their back, market participants hiked oil prices, with boosted confidence that if things do not get better, OPEC+ might step in to the rescue. Moreover, the group appears to extend the compensation deadline for OPEC+ laggards, such as Iraq, Nigeria and lately the UAE. It was clear that these countries will not be able to comply fully by the end of September and OPEC+ shows that the compensation will not be forgotten. But this is also a compromise that Saudi Arabia is willing to strike in order to ensure that market stability is preserved, benefiting all producers in the alliance, as a break-up would be devastating for countries with little ability to boost production as much as the Saudis.
“Nevertheless, it was clear that the alliance is clearly upset at the sub-compliers and showed that it is not willing to tolerate their lack of action for much longer.From a market confidence perspective, the relationship between the group’s producers is still on but seems fragile, and so do prices. Yet, commitment to address both sub-compliance and the Covid-19’s second wave brought back some of the lost confidence to the market. OPEC+ acted like a big brother, lashing out at the naughty ones, and saying ‘Count on me, I’m here if it will really be needed’ to the oil family,” the company said.
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