Oil analysts see battle for Asian market


Strong demand out of Asia has provided one of the few bright spots for an otherwise dreary 2020 for oil consumption.

A BATTLE for oil market share in Asia may be coming to a head as the world’s largest crude producers prepare for peak demand, according to some analysts.

Strong demand out of Asia has provided one of the few bright spots for an otherwise dreary 2020 for oil consumption as governments worldwide impose tougher restrictions to curb the spread of coronavirus ahead of a widespread vaccine rollout.

But in the wake of fresh warnings about the end of oil-demand growth, some analysts see a struggle brewing between key exporters like the U.S. and the OPEC+ alliance to gain market share in the region before it’s too late.

"It could be viewed as ‘now or never’ for large oil exporting nations such as Saudi Arabia and Russia, ” Ryan Fitzmaurice, commodities strategist at Rabobank, wrote in a report. "China’s demand for oil has never been stronger, but that window could be closing fast.”

As the pandemic brought about a historic slump in crude demand, a string of oil majors earlier this year predicted peak oil demand happening within the decade. Among the starkest warnings came from BP Plc, which said oil consumption may never recover to levels seen before the coronavirus crisis.

Meanwhile, the U.S. has made inroads in Asia’s oil market at the expense of OPEC+, Rabobank’s Fitzmaurice wrote, with the U.S. growing market share in China following last year’s trade agreement.

More broadly, OPEC+ can’t afford permanent market share losses this decade, with oil demand growth likely to peak by 2029 on the back of rising electric vehicle sales, Bank of America Global Research said in its Global Energy Weekly note.

"A battle for market share lies ahead and OPEC+ does not plan to make life easy for U.S. shale, ” the note said. "Entering a post-hydrocarbon world with large swaths of spare oil production capacity could be fiscally devastating to oil producers and OPEC will try to avoid it.” - Bloomberg

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3

   

Did you find this article insightful?

Yes
No

50% readers found this article insightful

Next In Business News

Cathay Pacific raises US$870mil in convertible bonds to shore up liquidity, shares fall
Retail darlings dented after Reddit group briefly shuts doors
Asia stocks follow Wall St tumble on valuation worries
Apple sees revenue growth accelerating after setting record for iPhone sales, China strength
ANALYSIS-Chinese retail banks gain consumer lending clout as fintechs fall out of favour
EXPLAINER-How retail traders squeezed Wall Street for bets against GameStop
Oil prices end mixed, despite big U.S. crude stock drawdown
Fed still in crisis-fighting mode as recovery appears to moderate
GLOBAL MARKETS-Stocks tumble on recovery fears, US$ climbs
Ringgit set to shine this year

Stories You'll Enjoy


-->