Petronas says oil demand recovery to remain fragile
Malaysian state-owned energy company Petronas said on December 28 that oil demand recovery remains fragile due to the spread of the new COVID-19 variants.
“The path towards sustained oil demand recovery remains fragile and uncertain due to the emergence of new COVID-19 variants that trigger fresh waves of lock-downs,” Petronas said in its activity outlook report for 2022-2024.
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“While most industry players are optimistic with the economic recovery, they still remain cautious. Thus, the smarter approach would be to strengthen efforts collectively and be ready to face the oil price volatility,” it added.
Pertonas said the LNG spot prices in the coming years are also expected to experience volatility due to the weather pattern and also potential change in policy, altering the supply-demand dynamics.
“This underscores the need for continuous investments in the energy sector to ensure reliable and sustainable supply of energy in an equitable manner,” the company said.
Amidst accelerating energy transition, gas and renewable will play a bigger role in meeting global energy needs, it said.
“Gas is more resilient than oil as growing share of electric vehicles, rising demand for sustainable fuels and increasing efficiency of the transport sector would erode the consumption of oil,” Petronas said. “While gas is cleaner than oil, challenges come in the form of methane leakages from operations and pipeline targeted by policymakers, following more stringent emission goals set at COP26.”