Driven by growing China imports, Brazil’s oil industry expects a recovery in domestic demand in the next months. However, the negative effects of COVID-19 are expected to last through the end of 2021.
Consumption could drop by more than 10 percent and oil prices should range between $20 and $40 per barrel without coordinated output cuts or social isolation. The drop in consumption could be limited to just 5 percent, with oil prices reaching the $60 to $70 range.
Despite the global drop in crude demand amid the pandemic, China’s demand for Brazil’s oil boosted state-controlled Petroleo Brasileiro SA’s exports to the Asian country to a record in April. IBP Group said China’s demand for oil will have an important role in this phase of recovery in Brazil. Petrobras said most of the country’s ongoing deepwater projects would be profitable with oil at $30 a barrel.
