Oil And Gas Market Under The Impact Of Coronavirus Consequences. This Time, Demand For Umbilicals Falls For 2020
These are challenging days for the oil and gas sector. A new analysis from Rystad Energy states that the demand for umbilical lines in 2020 will drop by about 32%, totaling only 713 km, well below the 1,041 km recorded in 2019.
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The forecast prior to the coronavirus crisis and the drop in oil prices was that the demand for 2020 would revolve around 900 km of umbilicals. Not only is this year’s drop significant, but the new estimate indicates that the demand for the product will remain below last year’s levels at least until the end of 2023.
According to Rystad, in 2021 the demand is expected to rise to around 800 km and stay at this level in 2022, only approaching 1,000 km again in 2023.
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Furthermore, the analysis includes the effects of the global recession and the downturn in the oil and gas sector. “If there is a global recession, materials like high-quality stainless steel [used in the manufacture of umbilicals] may decrease significantly in price. However, when the global economy recovers from Covid-19, material prices could rise before the oil and gas industry is ready to accept higher prices for umbilicals,” Rystad said in its analysis.

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