BAKU, Azerbaijan, January 18. Global oil demand growth forecast for 2023 has been revised up by 80,000 barrels per day (b/d), compared to the last month's report, to 1.9 mb/d, Trend reports via the latest oil market update from the International Energy Agency (IEA).
Thus, world oil demand for the whole 2023 is set at 101.7 mb/d.
"The preeminent driver of 2023 GDP and oil demand growth will be the timing and pace of China’s post-lockdown recovery – a variable surrounded by even more uncertainty than usual following December’s sudden policy U-turn. However, China’s persistently dim macro-economic outlook, characterized by rising unemployment, a slump in factory output and a deepening property crisis precludes a bigger upward revision," the IEA said.
According to the IEA report, jet fuel remains the largest source of growth (up by 840,000 b/d). OECD oil demand slumped by 900,000 b/d in 4Q22 as weak industrial activity and weather effects lowered use, while non-OECD demand was 500,000 b/d higher.
"This occurs against a backdrop of lower prices, a somewhat improved economic outlook and a faster than anticipated reopening of China. Overall, the global economic climate stays challenging, with (admittedly mild) recessions on the cards for the US and eurozone according to consensus estimate," the outlook noted.
Meanwhile, in 2023, the pace of gains in OECD oil use is set to halve from last year, to 470,000 b/d, as the prolonged economic slowdown continues to undermine demand.
"While developed economies enter 2023 in poor shape (4Q22 demand fell 910,000 b/d y-o-y), demand should improve steadily with growth expected to accelerate from 270,000 b/d y-o-y in 1Q23 to 850,000 b/d by 4Q23. Overall gains will be dominated by jet/kerosene (+430,000 b/d), but declining road fuel demand (gasoline -70,000 b/d, diesel -200,000 b/d) will limit the potential for faster growth," the report added.