OPEC continues to view the oil market fundamentals as strong with Chinese crude imports set to increase to a new annual record in 2023, the cartel said on Monday, describing the most recent negative market sentiment as exaggerated.
Saudi Arabia said it would extend its voluntary production cuts of 1 million barrels daily of crude until the end of the year.
For decades, China has been the leading driver of global oil demand growth thanks to an economy that maintained a blistering growth clip for a long stretch. China’s economy managed to expand at nearly 10% annually ever since Beijing embarked on economic reforms in 1978, ballooning from $1.2 trillion by the turn of the century to nearly $18 trillion in 2021. But as the law of large numbers dictates, that era of exemplary growth could be in the rearview mirror. Economic pundits have predicted that China’s growth rate will slow down to between 2 and 5 percent in the coming years thanks to a declining population and slowing productivity.
In its latest forecast, the IEA has projected demand to rise by 1.9 million barrels per day to 101.7 million barrels per day (bpd) this year
Citibank revised its demand growth outlook down by 1.4 million bpd to 2.2 million bpd y-o-y.
The current market situation was attributed to a disruption in supply following moves to ban Russian oil by the European Union
slowing demand growth and rising production from other major oil economies will help weather the effect of sanctions on Russia.
Oil prices sank 4 percent on Monday alongside equities, as continued coronavirus lockdowns in China, the top oil importer, sparked demand concerns.
Oil prices shot above US$139 a barrel this month, hitting peaks not seen since 2008, as Western sanctions tightened on Moscow over its invasion of Ukraine and disrupted oil sales from Russia, helping to fuel inflation that was already rising.
Target Corporation’s chief executive Brian Cornell: American consumers will drive less this year.Inflation in the U.S. in 2021 hit the highest in 40 years.