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China lockdowns hurt global oil demand, says IEA

The drop in oil demand in China, which is facing the effects of lockdowns related to Covid-19 outbreaks, is overlapping with robust consumption in other parts of the world and will constrain the general advance of the search for the commodity this year, according to an assessment by the company. International Energy Agency (IEA).

In a monthly report published on Wednesday (14), the IEA cut its forecast for Chinese oil demand this year by 400,000 barrels per day (bpd), to 15 million bpd, 420,000 bpd less than in 2021. .

For 2023, the Paris-based agency lowered its forecast for Chinese consumption by 300,000 bpd to 16 million bpd.

China, the world’s second-largest economy, has been the laggard in demand for oil. In other countries, oil consumption has remained surprisingly high despite the jump in global inflation, interest rate hikes and an economic slowdown.

In the document, the IEA assesses that consumption in the US has been exceeding expectations and is also strong in the Middle East, where warm temperatures stimulate above-average demand for oil-based electricity generation.

In Europe, the jump in natural gas prices – generated by Russia’s suspension of flows through the Nord Stream 1 pipeline – is helping to spur demand for oil as power plants switch to the commodity.

That trend is expected to account for a 700,000 bpd boost in the six-month period to March 2023, the IEA says, about 150,000 bpd more than the agency estimated in last month’s report.

For this year, the IEA cut its forecast for rising global oil demand by 100,000 bpd to 2 million bpd.

In the case of 2023, the agency continues to forecast an increase of 2.1 million bpd in demand. In this way, the IEA expects total consumption to reach 99.7 million bpd in 2022 and 101.8 million bpd next year.

The IEA also slightly raised its forecasts for global oil supply this year to 100.1 million bpd and in 2023 to 101.8 million bpd.

For supply outside the Organization of the Petroleum Exporting Countries (OPEC), the IEA maintained its forecast for 2022 at 65.5 million bpd, but cut next year’s by 100,000 bpd to 66.2 million bpd.

Source: CNN Brasil

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