RIYADH: As world leaders discuss the fight against climate change, global oil demand has bounced back above the key level of 100 million barrels a day last seen before the Covid-19 pandemic, according to BP.
Fossil fuel consumption is recovering despite growing urgency in the effort to curb emissions of greenhouse gases. The resurgence is pushing prices to multiyear highs and threatening the world’s economic recovery due to significant constraints in energy supplies, report agencies.
“Somewhere next year we will above pre-Covid levels,” BP Chief Financial Officer Murray Auchincloss said on a conference call on Tuesday.
Meanwhile, BP reported on Tuesday a sharp rise in third quarter profit, lifted by stronger oil and natural gas prices that have soared this year as economies recover from the pandemic.
BP’s underlying replacement cost profit, the company’s definition of net earnings, reached $3.32 billion in the third quarter, exceeding analysts’ expectations for $3.06 billion. That compares with $2.8 billion in profit in the second quarter and $86 million a year earlier, when energy demand and prices collapsed due to the coronavirus epidemic.
The firm said it would buy back an additional $1.25 billion of shares, using the proceeds of surging energy prices to woo investors who have become disenchanted with oil and gas. The surge back to 100 million barrels a day has happened despite the fact that air travel has yet to fully recover from the pandemic. It underscores how demand for diesel and petrochemicals has driven oil consumption over the last past two years.
Oil prices fell on Wednesday as industry data pointed to a big build in crude oil and distillate stocks in the United States, the world’s largest oil consumer, and as pressure mounted on OPEC to increase supply.
U.S. West Texas Intermediate (WTI) crude futures tumbled $1.30, or 1.6%, to $82.61 a barrel, after dropping to a low of $82.26 earlier.
“Crude prices are declining after the API reported the sixth straight week of crude oil inventory builds and as the Biden administration exhausts every possible plea to OPEC+ members before tapping their Strategic Petroleum Reserve,” said Edward Moya, senior analyst at OANDA.