In the last quarter of 2019, the world witnessed an advent of a strange ‘avalanche’ that spared no corner of the globe; no thanks to its inglorious designation, the novel human coronavirus disease (COVID-19). With a shattered global economy reeling from the impact of the outbreak, many income sources were temporarily or permanently lost. The result of this was an absence of the means of livelihood for individuals and communities resulting in a depressed global economy. Getti Energy stepped into the fray of making significant impacts wherever possible. As a goodwill measure, we undertook life-saving projects running into tens of thousands of Dollars in direct /indirect benefits to rural and disadvantaged communities. Additionally, we supported frontline healthcare workers by partnering with personal protective equipment (PPE) manufacturers to enhance the much-needed safety barriers for healthcare and other essential workers.
After the pandemic (or as it has subsided), Getti Energy remains committed to making the maximum positive impact on humanity. We continue to identify individuals and communities in dire need and then provide the much-needed intervention within our global corporate social responsibility framework. With these, and other complementary roles, we are optimistic that the human community will continue to brave adversities and remain stronger after the chips are down.
GETTI ENERGY’S VIEW OF THE FUTURE OIL MARKET
As earlier stated, the COVID-19 disease phenomenon was unprecedented in our recent history. Decreased or halted economic activities were direct impacts of mitigation effect to limit the spread of the disease. With more than 1 billion people in lockdown, global petroleum consumption decreased by more than 31% between March and April 2020. A supply glut resulting from the initial price war between Saudi Arabia and Russia further contributed to the crude oil market disequilibrium. The short-term effect of an excessive supply and a lackluster demand created a bearish oil market. For the first time, since the trading of West Texas Intermediary (WTI) oil began in 1983, the benchmark hit a negative threshold of $-40.32/barrel on April 20, 2020 on the NYMEX commodity exchange.
Under normal conditions, taking delivery of crude oil purchased is quite straightforward. The said normal physical settlement process was, however, impeded by the decline in the availability of committed crude oil storage capacity: no demand and excess supply resulted in no committed storage. As of the middle of April, the U.S. refineries production alone fell to 12.8 million barrels per day (b/d) which is about 4.1 million b/d (24%) less than the same time in 2019, and China’s domestic petroleum and other liquid fuel consumption (for instance) decreased by 600,000 barrels/day in reference to the same time frame.
GLOBAL OIL PRODUCTION AND CONSUMPTION:
The Covid-19 disease wiped out an equivalent of a decade worth of crude oil consumption between March and April 2020. However, as the world began to slowly return to some form of measured normalcy, economic activities started rising; grounded planes started to fly, heavy trucks and machineries got rolling again … etc. It is our firm belief that the world global demand for oil will continue to increase with economic activities, nudging the Oil and Gas industry to some sustained long-term stability even though major oil companies have shed capital expenditures by more than 30% in response to collapsed oil prices.
The world needs oil to run. And with Petroleum and Natural Gas contributing about 91% of the global energy consumption, demand for Oil and Natural Gas is expected to be on the increase, and as countries and companies rely on the price of oil to shore up their failing budgets, oil pricing will continue to be strategically calibrated. Thanks to ‘non-aligned’ countries that are now exporting more barrels of oil daily. Getti Energy will remain a player in the global upstream Petroleum and Natural Gas market as well as the future renewable energy peck.
