Global oil demand in transportation sectors, with the exception of jet fuel, could return to pre-pandemic levels by the fourth quarter of 2021, draining excess supplies from the market, Vitol's Chief Executive Officer Russell Hardy said.
Global oil inventories grew by 1.2 billion barrels in storage tanks and on the water after the Organization of the Petroleum Exporting Countries (OPEC) meeting in April, Hardy said at the virtual Asia Pacific Petroleum Conference.
"The market is slowly chewing through that excess inventory," he said, adding that about 300 million barrels have been drawn down from this year's peak and the company expects a similar volume to be taken out by year-end.
(Also read: India's fuel demand fell 15.6% year-on-year in August)
"In 2021, we see the market probably drawing similar levels again and that gets us back to normal stock levels towards the end of 2021," Hardy said.
Diesel and gasoline demand will likely have recovered by the fourth quarter next year, returning to pre-pandemic levels seen in 2019, he also said.
(Also read: This US state's gasoline tax rises 22% on effects of stay-at-home order)
"That's normal oil demand with the exception of jet fuel. Jet has got a long way to go as this conference is evidence to people are not moving around," Hardy said.
This is the first time in 36 years of existence that the APPEC conference, Asia's biggest gathering of oil traders, is being held virtually because of the difficulties in travelling during the Covid-19 pandemic.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.