Global Oil Demand to Grow 2mbpd in 2023: EA

Global oil demand is expected to grow by 2mbpd year on year in 2023 amid better-than-expected demand from the US and Europe, said Amrita Sen from Energy Aspects in an interview with CNBC.

• Demand growth is expected to slow next year to 1.2mbpd because the big upswing from China post Covid is not going to be there next year. There is still some risk because Energy Aspects expected a mild recession in the US because jet fuel demand is still around 1mbpd lower than in 2019.
• When askes why she thinks Chinese oil demand has decoupled from macro demand she said: “One of the things we have been seeing in the market, particularly in China, is the government has tried to make the economy, the GDP more focused on consumers and pivoting more towards consumer-led, which is more sustainable rather than simply pushing more and more stimulus. We are seeing that in the numbers, we are seeing far stronger gasoline and jet demand but for me the biggest takeaway from China was the fact that diesel demand, which above 40% of diesel demand used to be the transportation sector, now because of the logistics boom it is 70%, so you can see why it has decoupled”, Sen said.
• “It goes back a bit to Covid, remember when in April 2020 all of us were at home and nobody was flying or driving but we still managed to consume 80mbpd of oil globally. It is a bit like that I think oil demand is very inelastic when it is dependent on consumers, and I think China is pivoting more towards that”, Sen added.