…expects global oil demand to cross pre-pandemic levels in 2023
Secretary-general of OPEC, Mr. Haitham Al Ghais, has said that the global oil body is looking at an investment of $12.1 trillion to be made until 2045 to ensure stability in global energy markets.
Speaking yesterday at the Egypt Petroleum Show, in Cairo, the OPEC scribe said the cartel expects global oil demand to exceed pre-pandemic levels in 2023, amid an improving economic outlook in top crude importer China.
Mr Ghais forecast that oil demand is expected to reach record levels this year after China, the world’s second-largest economy, lifted pandemic curbs following strict adherence to a zero-Covid policy for nearly three years.
China is forecast to expand 5.2% this year after beating expectations with a 3% acceleration in 2022, according to the International Monetary Fund.
Brent, the benchmark for two thirds of the world’s oil, surged to $90 a barrel last month on hopes of a swift fuel demand rebound in China.
However, rising oil stocks in the US and expectations of further interest rate increases have weighed on crude futures in recent weeks.
Brent, which soared to nearly $140 a barrel following Russia’s invasion of Ukraine last year, closed trading on Friday at $86.39.
The International Energy Agency has said China will account for nearly half of its 2023 oil demand growth forecast of 1.9 million barrels per day.
China’s recovery and sanctions on Russian oil exports are expected to tighten global crude supplies in the second half of the year, analysts said.
At its meeting this month, the OPEC+ alliance of 23 oil-producing countries agreed to roll over existing output cuts of 2 million bpd.
A 1.1 million bpd rise in China demand this year could push oil markets back into a supply deficit in June and lead OPEC+ to reverse its production cuts, Goldman Sachs said in a research note last week.
“If Russia production were to stay flat, then Brent would likely only rise to $95 per barrel by December because steady OPEC production would only partly undo the bearish effects from higher supply and less elevated long-term costs,” Goldman Sachs said.