China’s annual crude oil imports slid to 10.3 million barrels per day in 2021, dropping for the first time since 2001, as Beijing clamped down on the refining sector to curb excess domestic fuel production while refiners drew down massive inventories.
India’s daily new COVID-19 cases have averaged 173,000 over the past week, up from around 8,000 in the same period a month ago.
The Indian government has not resorted to any draconian restrictions such as lockdowns, but the states have imposed some restrictions such as night curfews and decreased office occupancy, leading to a drop in mobility.
With US inflation, an interest rate hike by the Federal Reserve is now more likely in March.
Refinery margins in the US Gulf Coast increased, supported by a healthy domestic fuel pull from the manufacturing sector as well as firm gasoil and fuel oil exports.
Some industries expect that a limited volume of extra Iranian oil exports will come into effect from the second quarter of 2022, with total volumes rising by 1.4-1.5 million bpd by the second half of the year.
Kazakh production is likely back or close to full capacity, after last week’s public unrest appeared to subside.
Looking at 2022 balances, OPEC+ may continue to add more oil over the next month or two but as surplus in the first half; the market does not look like it needs more oil this year.
While commodity prices have rallied extensively in 2021, little has been achieved in resolving market imbalances through either demand destruction or supply increases.
Switching from gas to coal, industrial demand abatement, strong North Sea production and increased LNG imports have come in to offset lower Russian supply.
However, supply outages due to extreme weather conditions are easing in the US and Ecuador, while oil production in Libya, Nigeria, and Kazakhstan’s Tengiz field are rebounding after protests temporarily halted operations.