‎“OPEC” keeps raising expectations for Chinese oil demand ‎growth

The Organization of the Petroleum Exporting Countries (OPEC) today, Tuesday, again raised its forecast for the growth of Chinese oil demand in 2023 due to the easing of restrictions related to Covid-19 in the country, but it kept the forecast for total global demand unchanged, citing potential risks that could affect global growth negatively.

According to Reuters, OPEC said in a monthly report that global oil demand in 2023 will rise by 2.32 million barrels per day, or 2.3 percent, unchanged from previous expectations.

While an increase in Chinese demand would support the oil market, crude prices fell this week after the collapse of the Silicon Valley bank raised concerns of a new financial crisis. OPEC indicated potential risks that would negatively affect the global economy due to high interest rates

“Ending the closure in China after lifting the strict policy to confront Covid-19 will add great impetus to global economic growth,” OPEC said in the report.

OPEC added, “The rapid pace of rising interest rates and global debt levels could cause significant negative repercussions indirectly, and may negatively affect global growth activity.”

OPEC expects China’s oil demand to rise by 710,000 barrels per day in 2023 from the 590,000 barrels per day forecast last month, but it kept the forecast for total global demand unchanged due to downward revisions elsewhere.

The report also showed an increase in OPEC crude production in February, despite the OPEC + group’s pledge last year to cut production to support the market.

OPEC said that its production of crude oil in February rose by 117 thousand barrels per day to 28.92 million barrels per day.