Ro Sheela Tobben air 2/14/2021
(Bloomberg) – Oil demand is finally starting to emerge from a pandemic grip after months with Asia serving as the only clear place in the global oil market.
American refiners are processing the rarest since the economy came to a standstill in March in anticipation of a vaccine-driven rise in gasoline demand this summer. The uptick means the refiners are competing for domestic barrels that have for months been sent to stronger markets in Asia. Prices for loads of rates like crude West Texas Intermediate have picked up at least 50 cents a barrel since earlier this month.
The return of U.S. demand, which began when a global vaccination campaign began in December, is the latest development in oil extraction from the depths of the pandemic. For months oil prices were regulated by OPEC and its partners with production cuts, unaided by demand outside Asia.
As domestic oil demand recovers, it could meet supply shortages. An economy-led yield decline has brought about 2 million barrels per day of local crude off the market from a high of 13.1 million, after dozens of drillers knocked down budgets and filed for bankruptcy. The U.S. government will see yields return to just 11.5 million barrels per day in 2022.