IEA warns COVID vaccine unlikely to boost global oil demand
Global oil demand is unlikely to get a significant boost from the roll out of vaccines against COVID-19 until well into 2021, the International Energy Agency (IEA) says, a view that has curbed oil price gains since vaccine progress was announced earlier this week.
In its monthly report, the Paris-based IEA says that it is “far too early to know how and when vaccines will allow normal life to resume. For now, our forecasts do not anticipate a significant impact in the first half of 2021.
“The poor outlook for demand and rising production in some countries ... suggest that the current fundamentals are too weak to offer firm support to prices.”
Brent crude fell by 0.8 percent to £33 a barrel in early London trade, snapping three straight days of gains.
While the IEA report notes that OECD countries had modestly drawn down their crude oil stocks for two months in a row by September, it adds that storage levels are still not far from peaks in May, at the height of the pandemic.
Furthermore, it cites a resurgence of Covid-19 infections in Europe and the United States and renewed lockdown measures for revising down its outlook for global oil demand for 2020 by 400,000 barrels per day (bpd) compared with its last estimate.
However, it states that the outlook has improved due to raised expectations for China and India, where it forecasts increased demand, though it cautions that the forecast assumes no new waves of the pandemic.
It also warns that plans by OPEC and its allies, including Russia, to boost output by two million bpd from January 2021 would mean that supply will outweigh demand. Draws on oil storage would halt in the first quarter of 2021 if the producer group follows through on its plans to taper their production cut pact, it adds.
“Unless the fundamentals change, the task of re-balancing the market will make slow progress,” the IEA says.
The IEA report adds that the agency has revised up its prediction for demand growth in 2021, which will still represent a drop of 3 million bpd below pre-pandemic levels in 2019.
“With a Covid-19 vaccine unlikely to ride to the rescue of the global oil market for some time, the combination of weaker demand and rising oil supply provides a difficult backdrop to the meeting of OPEC+ countries due to take place on December 1.
“Our current balances, incorporating the quota increase of 2 mb/d included in the OPEC+ supply agreement, imply almost zero stock change in the first quarter of 2021. Unless the fundamentals change, the task of re-balancing the market will make slow progress,” it concludes.
Global Offshore rebrands Enelift and invests in global hubs
Global Offshore has rebranded Enelift and will invest "a seven-figure sum" in establishing new support hubs in Houston, Dubai, Singapore, Perth and the Caspian during the next six months.
The investment will cover oil, gas and renewables, mainly concentrating on manufacturing capability with associated R&D, as well as in stock held in the hubs.
The company’s flagship Hinge Lok technology provides aluminium, non-welded light weight transportation cradle for casing and tubing. Enelift now plans to enhance its offering by augmenting its existing solutions with robotics and remote operational and training technology, which will reduce manpower for handling offshore equipment that is transported and stored using the Hinge Lok system.
Enelift is partnering with "a Japanese robotics company" and the technology will be trialed with "a Norwegian operator on a Norwegian drilling rig", according to a statement.
Operating from its bases in Aberdeen, UK and Esbjerg, Enelift was founded by 35-year industry veteran and Managing Director Paul Brebner 10 years ago to offer the offshore energy industries safe, reliable and efficient storage and transportation of equipment.
The expansion plans are bolstered by the appointment of Jim Clark of the Craigendarroch Group to Chairman, and Adam Maitland to Non-Executive Director. Maitland is the Managing Director of Hutcheon Mearns IF, and brings his wealth of expertise in the field of corporate finance.
Brebner said Enelift may be a new name in the market, but the experience it brings is "industry renowned".
"Our solutions are underpinned by safety that enables inefficiencies and their associated costs to be eradicated – meaning operational personnel can focus doing what they do best, safely. We remain committed to providing the safest storage and transportation solutions for equipment in the sector as we grow our global operations," he said.
Clark said the market is changing and its solutions fully support customers’ economic and safety aspirations.
"We are very well placed to take full advantage of increasing opportunities in the Middle East, Africa, Far East and Americas. Safety is our absolute commitment to our customers and our support hubs will facilitate this. Aligning our identity to our entire offering ensures that we will drive our expansion through new products and global support sites across the rest of this year."