The Organization of the Petroleum Exporting Countries (OPEC) raised its expectations for Chinese oil demand growth in 2023 on Tuesday due to the easing of COVID-19 related restrictions in the country, while keeping its global demand forecasts unchanged, citing potential risks that could negatively impact global growth.
OPEC confirmed that global oil demand in 2023 is set to increase by 2.32 million barrels per day, or 2.3 percent, remaining unchanged from previous forecasts.
While increased Chinese demand could support the oil market, crude prices fell this week following concerns of a new crisis triggered by the collapse of Silicon Valley Bank. OPEC pointed out potential risks that could negatively affect the global economy due to rising interest rates.
OPEC stated, "The end of lockdowns in China after the lifting of strict COVID-19 policies will add significant momentum to global economic growth," adding that "the rapid pace of rising interest rates and global debt levels could lead to significant negative repercussions, adversely affecting global growth activity."
It expects China's oil demand to rise by 710,000 barrels per day in 2023, up from 590,000 barrels per day in last month's forecast.
