Kostyantyn Kryvopust researched world oil markets


Crude oil prices: The spot price of Brent crude oil averaged $82 per barrel in January (b), about $2 per barrel higher than the December 2022 average. Oil prices rose during January partly due to expectations of increased demand for oil. easing of COVID-19 restrictions and increased mobility in China. Perceptions of a less severe recession and some improvement in macroeconomic conditions also likely contributed to the gains in crude oil prices over the past month.

Last month, we highlighted China’s oil demand and Russia’s oil production as the two main uncertainties in the oil market this year, and we revised our forecasts for both in this month’s forecast. The revisions follow China’s easing of COVID-19 restrictions, which boosted our forecast for oil demand growth. At the same time, Russia produced more oil than we expected in January, and we raised our forecast for Russian oil production through the end of 2024. We also lowered our OPEC oil production forecast due to rising global oil inventories. These changes largely offset each other in our global balance sheet forecasts, and after the first quarter of 2023 we left our crude oil price forecast largely unchanged from last month’s forecast.

We expect the Brent spot price to average $85/bbl in the first half of 2023 (1H23). However, we expect global oil production to continue to outpace demand over the forecast period, leading to a steady increase in global oil inventories through 2024 and lower oil prices. After increasing by an average of 0.6 million bpd in 2022, we expect global oil inventories to also increase by an average of 0.6 million bpd in 2023, with growth slowing to 0.4 million bpd in in 2024. Accordingly, our forecast Brent spot price falls to an average of $82/bbl in 2H23 and $78/bbl in 2024.

Global demand for oil: global liquid fuel consumption is projected to grow from 99.4 million barrels per day (b/d) in 2022 to 102.3 million b/d in 2024, driven mainly by growth in China and other non-OECD countries. However, significant uncertainty regarding our demand forecast remains based on the possible effects of changing global economic conditions and China’s departure from a “zero spread of COVID” strategy. We forecast that the lifting of restrictions will boost Chinese oil demand by 0.7 million barrels per day in 2023 and by 0.4 million barrels per day in 2024. We expect oil demand in OECD countries to remain largely flat over the forecast period due to inflationary economic conditions. pressure continues to limit GDP growth and oil demand as the oil intensity of OECD economies declines.

Global oil supply: Global liquid fuel production averaged about 100.0 million barrels per day in 2022, and we forecast it to grow by an average of 1.1 million barrels per day in 2023 and 1.5 million barrels per day in 2024. year Increases in non-OPEC production in 2023 and 2024, as well as increases in OPEC production in 2024, will largely offset a decline in Russian production of approximately 1.1 million barrels per day over the forecast period.

We forecast Russian oil and liquids production to decline to 9.9 mb/d in 2023 from over 10.9 mb/d in 2022, before averaging 9.8 mb/d in 2024 year For 2023 and 2024, we forecast about 0.4 million barrels per day more than last month’s STEO. We previously predicted that most of Russia’s crude oil exports, which are subject to EU sanctions imposed on December 5, will find new markets, but the sanctions will lead to some reduction in production. However, we estimate that Russia’s crude oil exports increased in January after a brief decline in December and have since started to exceed totals in November, with little impact on Russian crude oil production.

The EU’s ban on seaborne imports of petroleum products from Russia, which began on February 5, could be more disruptive than the crude oil import ban imposed in December. We assume that Russia will be able to redirect part of its oil exports under EU sanctions. But we do not expect all petroleum exports to find new destinations due to the limited availability of clean tankers, which will force refiners in Russia to cut crude consumption and Russian crude production to decline.

Global oil and other liquids
2021 year 2022 year 2023 year 2024 year
Brent oil spot price
(dollars per barrel)
70.89 100.94 83.63 77.57
World production of liquid fuel
(million barrels per day)
95.70 99.95 101.10 102.61
OPEC liquid fuel production
(million barrels per day)
31.66 34.17 34.08 34.77
Liquid fuel production outside OPEC
(million barrels per day)
64.03 65.78 67.02 67.85
World liquid fuel consumption
(million barrels per day)
97.12 99.36 100.47 102.26
Global GDP
(percentage change)
6.2 3.2 1.8 3.3

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