OPEC again raises its forecast for the growth of Chinese oil demand

Global economic growth projected for 2023 unchanged at 2.6%
Chinese oil demand
China gas station

The Organization of the Petroleum Exporting Countries (OPEC) raised on Thursday its forecast for Chinese oil demand growth this year. But it kept its forecast for global demand growth unchanged.

OPEC attributed this to possible downward factors such as the U.S. debt ceiling. It said in a monthly report that global oil demand in 2023 will rise by 2.33 million barrels per day or 2.3 percent.

That is little changed from last month’s forecast of 2.32 million bpd.

OPEC said in the report that it had made “adjustments slightly on the better-than-expected performance of the Chinese economy, while other regions are expected to see a slight decline due to economic challenges that are likely to weigh on oil demand.”

Read: Oil prices steady after surge on OPEC+ cut decision, inflicting losses on speculators 

OPEC said Chinese oil demand is now expected to grow by 800,000 bpd, up from 760,000 bpd in last month’s forecast.

Global demand growth estimates were unchanged for the third consecutive month. OPEC kept its economic growth forecast for 2023 at 2.6 percent, citing potential downsides such as stubborn inflation and increased debt payments as a result of higher interest rates.

“With other debt-related challenges likely to emerge, geopolitical uncertainties remain and inflation continues,” OPEC said in its economic commentary.

“In addition, the issue of the US debt ceiling has not yet been resolved, which could have economic consequences.”

UAE Energy Minister Suhail Al Mazrouei said on Tuesday that the additional voluntary production cuts approved by the OPEC+ alliance for oil-producing countries were aimed at balancing oil markets.

He added that he was concerned about future supply shortages due to lack of investment. “I’m not that worried about the very near term. I think we can balance supply and demand. I’m more concerned about the levels of investment needed in the future.”

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