The whiff of optimism being expressed in respectable quarters about chances that oil demand could yet return to the psychological comfortable figure of 100 million barrels per day received another heavyweight support last week with ConocoPhillips joining the fray to issue a forward-looking statement that demand will not only return to that number but that it will even grow, per Reuters. But the oil company said it expects some turbulence next year, noting that there would be, “quite a bit of uncertainty next year,” said Dominic Macklon, senior vice president.
ConocoPhillips’ prediction on global oil demand departs from that put forward earlier by BP, which sees the coronavirus pandemic having a long-term effect on oil demand, compounded by climate concerns, and that oil demand may never again recover to those seen in 2019.
Analysts, however, say that the prediction is in line with that of Gazprom Neft’s, which sees full oil demand recovery by the end of next year. Alexander Novak, the Russian energy minister, is even said to have a rosier outlook, seeing oil demand recovering fully by the second quarter of next year.
OPEC and the International Energy Agency (IEA), however, have more pessimistic views of global oil demand, with both stating that they do not expect that global oil demand will ever fully recover from being crushed by the coronavirus pandemic.
“The path ahead is treacherous,” the IEA said in its latest outlook, adding that the market outlook was “even more fragile” than expected. Macklon sees U.S. shale output falling by 4 million barrels per day in 2022.
For Conoco specifically, it seems next year’s capital spending as below what it had planned to spend this year, which was $6.6 billion. Conoco has not joined its peers in laying off staff, but it had halted all fracking crews amid the pandemic. It is in the process of returning two of those fracking crews back into the field, Macklon has said