International oil demand continues to be sturdy and shall be such via the top of this yr, OPEC Secretary Common Haitham al-Ghais advised Reuters, noting that the current sell-off in oil would not replicate fundamentals and is pushed by concern.
“We nonetheless really feel very bullish on demand and really optimistic on demand for the remainder of this yr,” al-Ghais advised Reuters in an interview printed on Thursday.
Oil costs dropped earlier this month to their lowest degree in six months, to the extent simply earlier than the Russian invasion of Ukraine. The transfer decrease was pushed by fears of recession and issues concerning the well being of the Chinese language financial system and was additional exacerbated by skinny buying and selling volumes as merchants and speculators are both on trip or not buying and selling oil amid heightened volatility.
OPEC, nonetheless, sees sturdy demand, in response to its new secretary basic.
“There’s numerous hypothesis and anxiousness, and that is what’s predominantly driving the drop in costs,” al-Ghais advised Reuters.
“Whereas within the bodily market we see issues a lot in a different way. Demand continues to be sturdy,” OPEC’s chief added.
Fears of a significant Chinese language financial slowdown are overblown, in response to al-Ghais.
OPEC did revise down final week its world oil demand development estimate for this yr by 260,000 barrels per day (bpd) however stated in its closely-watched Month-to-month Oil Market Report (MOMR) it nonetheless expects “wholesome development”.
OPEC sees world oil demand rising by 3.1 million bpd this yr, down by 260,000 bpd from final month’s development evaluation of three.36 million bpd development.
Demand continues to be anticipated to point out “wholesome development of three.1 mb/d, together with the just lately noticed pattern of burning extra crude in energy technology,” OPEC stated. This yr, complete oil demand is anticipated to common round 100 million bpd.
OPEC left its 2023 demand development estimate unchanged from the earlier report at 2.7 million bpd, with complete 2023 oil demand anticipated to achieve 102.72 million bpd.
“In 2023, expectations for wholesome world financial development, mixed with anticipated enhancements within the containment of COVID-19 in China, are anticipated to spice up consumption of oil,” OPEC stated final week.
By Charles Kennedy for Oilprice.com