While Nasser warned that spending cuts could create a shortage, and it won't be a short-term affair. Occidental Petroleum expects global oil supply and demand to rebalance by the end of 2021.
Occidental CEO Vicki Hollub told the Energy Intelligence Forum that the US crude oil output would grow modestly next year. Hollub said oil demand and prices have tumbled this year as a glut of oil hit the market just before the Covid-19 pandemic swept the globe.
Oil demand has rebounded to around 94 million bpd, but will take some time to return to 100 million bpd. The world will get to peak supply before peak demand, Hollub said.
The dismal market forecasts presented by the two global oil giants are in line with the recent oil demand outlook presented by the International Energy Agency.
The IEA has said the travel bans and lockdowns aimed at mitigating the spread of the coronavirus had contributed to the sharpest drop in global energy demand, some five per cent, since World War II, but at its current pace, global oil demand is set to recover to pre-pandemic levels in 2023.
The IEA said while the pandemic has set the growth of global energy demand back by two and a half years, peak crude oil demand has already been reached in advanced economies such as the US and the European Union, while developing economies such as China and India will drive growing oil demand in the years ahead.
The IEA said in its annual report on the long-term future of the energy industry that the global oil demand would plateau and flatten out during the 2030s, even if the pandemic stings the global economy for longer than expected. The agency expects the global economy in 2040 to be seven per cent smaller than it did last year.
Emerging market oil demand will rise by nine million bpd in the years to 2030, offsetting a drop in the developed world, it said, while observing that said the outbreak of the Covid-19 pandemic has injected "huge near-term uncertainty" into forecasting the future of energy, the Paris-based IEA said.
In 2021, IEA expects an increase of 5.5 million bpd in oil demand but to a higher total than Opec's at 97.2 million bpd. In its latest forecast, Opec said oil demand would average 96.84 million bpd next year, 6.5 million bpd higher than 2020's.
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