Page 4 - Policy_Economic_Report_September2020

Policy and Economic Report:
Oil & Gas Market

World oil demand in 2020 is estimated to decline by 9.5 mb/d in 2020, a downwards change by 0.4 mb/d
as compared to July month’s assessment. Forecasted demand for 2020 is 90.2 mb/d. Downward revision
is mainly due to the slower than expected recovery in demand in a countries like India, Indonesia, Thailand
etc. With the demand performing better than the forecasted decline, the impact was lower in OECD
Americas and OECD Europe. Refinery utilization decreased in the month of August and reached 86.04%
as demand remained subdued.

In Asia refinery margin declined in August despite to the smallest extent compared with other region, and
losing the recovery made in July 2020. In India, demand for refined products declined by 8.2 % as rising
Covid-19 cases impacted the industrial and economic activities across the nations. Except Petrol and ATF
all other major products had a demand decline by two digit percentage.

Natural Gas price in the Henry hub went up by 31.6% to reach $2.29/MMBtu. Increase in consumption of
Natural Gas by industrial users and production curtailment helped the Henry hub price to increase in the
month of August. Natural gas prices in Europe went up by 58.9% in the month of August. With industrial
activities performing better than the expectation, demand for Natural gas picked up in the month as
helped in recovery of the gas price. Average gas price in the Europe stood at USD 2.86 MMBtu. Asian
LNG prices jumped to a more than four-month high to reach $3.10 per MMBtu. September deliveries in
the region stood close to $3 per MMBtu across all the major producers in the region.

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September 2020