Optimism gradually prevailed regarding the growth of the global economy and the growth of oil demand in 2023, as the International Energy Agency, in its latest report, revised its expectations for demand growth upwards, bringing the new figure to 1.9 million barrels per day, an increase of 200 thousand barrels over last month.
The agency attributed the reason for this to the expected growth from China, which will account for regarding half of the increase in demand this year, equivalent to 800 thousand barrels per day, so that oil will witness a historic year in terms of demand reaching 101 million barrels per day.
At the same time, the Organization of the Petroleum Exporting Countries (OPEC) was more conservative regarding demand this year, as it did not change its numbers from last month, and expectations of demand growth were fixed at 2.2 million barrels per day, and its expectations for demand growth from China this year were in the range of 500 thousand barrels. Daily.
If we look at the market view, we will find that the lowest expectations for demand growth in China this year are in the range of 800 thousand barrels per day, according to a Bloomberg survey, and the highest is the estimates of Goldman Sachs at 1.7 million barrels per day.
Regardless of the optimism and reservation in the numbers, the constant fact remains that any increase in demand from China will not be matched by an adequate increase in the oil supply, as it is expected that the world will not add more than one million to 1.5 million barrels per day at a time when demand will grow at higher levels, and for this reason it will enter The market is in deficit because of China.
Oil prices began to rise and the market began to think regarding pricing demand from China, but their thinking regarding pricing supply concerns is less, and the challenge will remain: How will this deficit and this demand be covered, which will make prices reach levels of $100 a barrel, which is the average that Goldman Sachs expects And many market analysts?
In light of these conditions in the second half, everyone will look to the OPEC+ coalition to do something, but the other challenge is that Russia will face a problem in supplying the world with more oil if the price ceiling and the European embargo continue to be applied to it.
But as usual, OPEC Plus will find a solution, and it must find a solution. There is no party in the market that can do anything now except OPEC Plus, even if US production increases to record levels this year, as expected.
according to Middle east
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