The Financial Times has outlined five ‘things to watch’ related to the oil industry for 2021. They are:

• Demand, which is expected to rise by the greatest amount (6 million barrels/day) in history in 2021, to an average of 96.9 million b/d, yet still be below pre-pandemic highs of 100 million b/d. The rise is due to come in the second half of the year, after vaccines have been rolled out.
• Supply, which is somewhat uncertain due to capital spending cuts over the previous 12 months – this is a ‘wait and see’ parameter.
• Opec ‘plus’ – after an initial price war, Russia and Opec countries agreed production cuts in 2020, and then slowly lifted them towards the end of the year, yet the prolonged nature of the pandemic has meant that demand has remained low while production has risen, leading to rising tensions within the group.
• Geopolitics, particularly with the election of Joe Biden to the US presidency, but also in those oil-producing countries that have been hit hard economically over the course of the pandemic, increasing instability within their regions.
• Refining, with permanent plant shutdowns expected to continue in 2021 after low margins in 2020; those that survive may see a return to higher margins.

Overall, as with most things to do with the pandemic, there is considerable uncertainty added to the already unpredictable nature of events.