According to the Gulf Times website on February 15, a few months later, oil demand in the United States has finally begun to get rid of the new coronavirus pandemic. Before that, Asia was the only bright spot in the global market.
US refineries are processing the most crude oil since the economy stalled in March, as vaccine driven gasoline demand is expected to increase this summer. The rise in oil prices means refiners are scrambling for domestic oil, which has been shipped to stronger markets in Asia for months. The price of a grade like West Texas Intermediate has risen at least 50 cents a barrel since earlier this month.
The recovery of U.S. demand began with the launch of the global vaccination campaign in December last year, the latest progress in the recovery of oil from the abyss of the pandemic. For months, oil prices have been managed by OPEC and its partners through production cuts, without the help of demand outside Asia.
With the recovery of domestic oil demand, there may be a shortage of supply. After dozens of drilling companies slashed their budgets and filed for bankruptcy, the economy driven decline in production reduced local crude oil by about 2 million barrels per day from a peak of 13.1 million barrels per day. The US government expects oil production to return to 11.5 million barrels a day in 2022.