OPEC Expects Chinese Oil Demand to Rebound

OPEC Expects Chinese Oil Demand to Rebound

OPEC forecasted that China’s COVID-19 restrictions would be relaxed this year, which will boost global growth. The organization also sounded optimistic about the prospects for the global economy in 2023, Reuters reported.

World 2023’s will increase by 2.22 million barrels per day, or 2.2%, according to OPEC’s monthly report.

If it happens, a stronger economy might result in higher revisions to demand and sustain oil prices, which have risen in 2023 on expectations of Chinese demand. Even if it still anticipates a relative downturn beginning in 2022, OPEC expressed optimism about the prospects for the global economy.

“The global momentum in the fourth quarter of 2022 appears stronger than previously expected, potentially providing a sound base for the year 2023,” OPEC said in the report.

“Chinese oil demand is on course to rebound due to the recent relaxation of the country’s zero-COVID-19 measures,” it said in a separate section, adding that plans to expand fiscal spending were also likely to support demand.

In the report, OPEC increased its projection for global economic growth in 2022 from 2.5% to 3%, citing higher growth than anticipated in the US and the euro zone in 2018, but holding the forecast for 2023 at 2.5%.

“Downside risks include higher-than-expected inflation, which could prompt further monetary tightening by major central banks,” OPEC said.


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