Key Points from IEA’s Oil Market Report – April 2023
- The IEA Oil Market Report (OMR) provides data, forecasts, and analysis on the global oil market.
- World oil demand is expected to rise to a record 101.9 mb/d in 2023 by 2mb/d, with non-OECD countries accounting for 90% of the growth.
- Jet/kerosene accounts for 57% of 2023 gains, while the apparent weakness in industrial activity is impacting gasoil demand, whereas the services sector and personal consumption are driving gasoline and jet uptake.
- OECD demand contracted by 390 kb/d y-o-y in 1Q23, its second consecutive quarter of decline, while non-OECD demand is rising.
- Extra cuts by OPEC+ will push world oil supply down 400 kb/d by end-2023, causing a substantial supply deficit to emerge by then.
- Annual gains in refining throughput are expected to double to 2.1 mb/d, with runs in the US normalizing and Chinese activity materially higher than a weak 2Q22 baseline.
- ICE Brent oil futures slumped to a 15-month low of $71/bbl in mid-March but rebounded later to trade at $87/bbl, following expectations of Federal Reserve interest rate cuts later this year and surprise OPEC+ production cuts.
- Surprise OPEC+ supply cuts announced on 2 April, immediately triggered a $7/bbl jump in North Sea Dated crude to $85/bbl, pushing oil prices higher at a time of heightened economic uncertainty, even as industrial activity slows down.
- Consumers currently under siege from inflation will suffer even more from higher prices, especially in emerging and developing economies.
The IEA’s Oil Market Report reveals that the oil market remains volatile, with supply and demand factors impacting prices. Consumers may face inflated prices for basic necessities, auguring badly for the economic recovery and growth. With the current economic uncertainty, the impact of OPEC+ cuts on prices and supply deficit in H2 2023 remains to be seen.
Read the full report at https://www.iea.org/reports/oil-market-report-april-2023