Chunzi Xu, Romaine Bostick and Katie Greifeld, Bloomberg News
HOUSTON/HONG KONG/NEW YORK
EnergiesNet.com 10 02 2023
The drag on oil demand in China, Europe and the US is weighing heavily on crude prices, capping the potential gains from OPEC+ supply cuts, Citigroup Inc. analyst Ed Morse says.
China is cutting back purchases of expensive crude and exporting more high-value refined products as the country grows to be almost as important to oil markets as OPEC+, Morse said in an interview on Bloomberg Television. The nation’s pullback will counter crude’s recent rally and help shift the oil market to a surplus next year, with Brent collapsing to the low $70s a barrel, Morse wrote in a note earlier today.
China’s current oil inventories could satisfy about 130 days of its demand, outstripping the global standard of around 90 days, he said.
“They’ve really overdone it,” said Morse, Citi’s global head of commodities research.
Oil production growth from Iran, Iraq, Libya, Nigeria and Venezuela will continue at the rate of around 1 million barrels a day, Morse said, a source of new supplies that has been underestimated by the Organization of Petroleum Exporting Countries and the International Energy Agency alike.
Oil fell below $90 a barrel on Monday on worries that further interest rate hikes could slow the US economy.
bloomberg.com 10 02 2023
