The demand for oil in the world is projected to recover to pre-2020 levels due to several factors, including economic stimulus recovery. According to the International Energy Agency, global demand, which fell as much as 30% during 2020, is now back to nearly 95% of what it was prior to the health crisis. Revival of oil prices was due to a combination of aggressive strategies of the Organization of the Petroleum Exporting Countries (OPEC) and the alliance of oil exporters, including cutbacks in production.
Optimism In Travel
Texas is the biggest producer of oil in the US, but last year was a difficult one. The industry started shutting wells and curbed production levels. In addition, the industry is risky, and each day, workers are exposed to the threats of working in the oilfield. Serious injuries and even wrongful death can occur in the workplace, and this has been an issue that Texan workers have had to face, often drafting in legal help. An oilfield accident lawyer in Austin, for example, will look at the cause of injuries or deaths, such as burns, explosions, or fires to establish whether the employer did their utmost to apply safety measures. If negligence is determined, victims can seek compensation and claims for personal losses caused by rig mishaps. Hence, it made sense to close wells, reduce output, and minimize oilfield accident claims when demand was low.
However, with demand recovering, Texas is boosting its production and adding jobs. One major reason is that people have renewed optimism in travel this year. In fact, in the US alone, air travel has picked up, with commercial flights comparable to pre-2020 levels. The movement of gasoline and diesel has also increased from US Gulf refineries to Mexican ports, as resorts in Latin America are gearing up for the influx of visitors over the spring break. In Asia, demand for jet fuel has also seen an improvement, driven by the increase in domestic flights. Back in the US, road traffic has improved, such as the route from southern California to Las Vegas. Although most European drivers are staying at home, in Asia, activity is picking up, with China leading the rebound.
Online shopping and delivery has peaked, and this has, in turn, increased the demand for diesel to fuel up trucks. For example, the demand for diesel this year is above the 2020 spring levels. E-commerce is here to stay, given its practicality, ability to provide a wide range of products, and convenient delivery options.
China is experiencing the same trend, and people chose to stay at home during the Lunar Year instead of visiting families. Its postal service was very busy, collecting and delivering more than 660 million parcels during the holiday season. India has experienced the same surge in fuel consumption.
Things are looking up for the oil and gas industry this year. Evidently, ramped up vaccination, economic stimulus packages, and easing of national restrictions across the world play important roles in the recovery of demand, including optimism in travel and online shopping.