BAKU, Azerbaijan, Sept.5
By Leman Zeynalova - Trend:
Recent rise in US crude production won’t last long, Trend reports with reference to the UK-based Capital Economics research and consulting company.
“Crude stocks in the US continued to sink in August and are now towards the lower end of their 2015-19 range. A key factor driving this decline has been a rebound in product demand; implied gasoline demand is already back to pre-pandemic levels, and jet fuel demand isn’t far behind,” said the company.
Meanwhile, US crude production has recently started to rise.
“However, we doubt that this will be sustained, not least because much of it has been driven by a running down of previously-drilled wells which cannot continue indefinitely.
At the same time, new drilling activity in the US remains very subdued relative to its typical relationship with oil prices. It’s not entirely clear why this is the case, not least because prices are now well above marginal cost, but it does suggest that the recent rise in US crude output is unlikely to be sustained,” said Capital Economics.