BAKU, Azerbaijan, June 17. Global oil demand growth is revised lower by 0.1 mb/d to 2.2 mb/d in 2022 and by 0.11 mb/d to 1.4 mb/d in 2023, Trend reports with reference to the Oxford Institute of Energy Studies (OIES).
The downward revisions in both years reflect mainly the inflationary pressures weighing on the price sensitive non-OECD demand outlook.
China’s extending zero-COVID policy constraints a strong demand rebound in H2, with the impact of restrictions on mobility and consumption persisting, and as a result the Chinese demand outlook remains unchanged at 0.2 mb/d in 2022 and 0.35 mb/d in 2023.
OECD demand shows a temporary resilience supported by the consumers’ post COVID recovery, but risks are tilted to the downside as persistent price pressures and supply-chain bottlenecks continue to undermine the short-term outlook. OECD gasoline and diesel demand remain the most at risk.
Overall, risks to the demand outlook are tilted to the downside and the risk of demand responses to higher oil prices and slower economic growth increases in 2023. The global demand growth outcome in Q3 will be critical to the outlook.
Global oil supply is projected to grow by 4.9 mb/d in 2022 and 0.4 mb/d in 2023. Global supplies find little comfort as most OPEC+ struggle to meet their quotas, the prospects of reaching an Iran nuclear deal in the very near-term have diminished, US shale growth remains constrained by surging cost pressures and capital discipline, and non-OPEC supply elsewhere remains price inelastic due to years of underinvestment and capacity losses during COVID. In the near-term, the crude market finds some relief from the continued SPR releases, but this will be temporary.
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