OPEC continues to view the oil market fundamentals as strong with Chinese crude imports set to increase to a new annual record in 2023, the cartel said on Monday, describing the most recent negative market sentiment as exaggerated.
“Recent data confirms robust major global growth trends and healthy oil market fundamentals,” OPEC said in its closely-watched Monthly Oil Market Report (MOMR), echoing last week’s comments from Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman.
Last week, the energy minister of OPEC’s top producer and the world’s largest crude oil exporter, Saudi Arabia, said that oil demand continues to be robust and blamed speculators for the most recent drop in oil prices.
Over the past two weeks, oil has erased all the gains made since the Hamas attack on Israel in early October, and prices have slid to the lowest level since July.
OPEC and its members, however, see strong market fundamentals and expect healthy oil demand growth both this year and next.
“On the global economic growth front, and as the US economy continues the very strong growth it experienced in 3Q23, the IMF has recently upgraded Chinese economic growth projection for 2023 to 5.4%,” OPEC said in a featured article in its monthly report on Monday.
“With this, and despite the overblown negative sentiment in the market regarding China’s oil demand performance, and global oil market in general, the latest data shows Chinese crude imports increasing to 11.4 mb/d in October, and remaining on track to reach a new annual record high for this year, at around the same level.”
The cartel revised its forecast for oil demand growth for 2023 slightly higher by 20,000 barrels per day (bpd) from last month’s estimate, and now sees global oil demand growing by 2.5 million bpd this year, thanks to upward revisions to China’s oil demand in the second half. For 2024, world oil demand is expected to grow by a healthy 2.2 million bpd, unchanged from the previous month’s assessment, OPEC said.
By Tsvetana Paraskova for Oilprice.com