The lifting of Covid-19 restrictions in China is expected to lift global oil demand this year to a new record, the International Energy Agency (IEA) said on Wednesday (18), while price cap to Russia could hurt supply.
“Two wildcards dominate the oil market outlook for 2023: Russia and China,” the Paris-based energy body said in its monthly oil report.
“Russian supply slows under the full impact of sanctions (while) China will drive nearly half of this global demand growth, even if the shape and speed of its reopening remains uncertain.”
Weak industrial activity and mild weather helped reduce oil demand by almost a million barrels per day in developed OECD countries in the last quarter of 2022.
But despite possible mild recessions in Europe and the United States, China’s expected reopening should fuel recovery in nearby Asian economies, with the country taking the lead from India as the world’s leader in oil demand growth.
“The main driver of GDP growth and oil demand in 2023 will be the timing and pace of China’s post-lockdown recovery,” the IEA said.
Meanwhile, the main growth in oil supply is expected to come from the United States, as production from the OPEC+ producer group will fall by 870,000 barrels per day (bpd), mostly in Russia.
Russia’s oil output was hurt by just 200,000 barrels per day (bpd) in December after the European Union banned imports of Russian seaborne crude and a coalition of countries imposed a price cap on oil, the IEA said. .
Source: CNN Brasil
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