07/11 Closing Prices / revised 07/12/2024 07:42 GMT |        07/11 OPEC Basket   $86.11   +$0.71 cents 07/11 Mexico Basket (MME) $76.61   +$0.44 cents   05/31 Venezuela Basket (Merey)  $70 45   -$4.36 cents| 07/11 NYMEX WTI  August CLQ24  $82.62 +$0.52 cents  | 07/11 ICE Brent Sept  BRNU24  $85.40 +$0.32 cents  | 07/11 NYMEX Gasoline Aug RBQ24  $2.52 +0.6 %  |  07/11 NYMEX  Heating Oil  Aug  RBQ 24    $2.52  -0.5% | 07/11 Natural Gas August NGQ 24   $2.27  -2.6%  | 07/05 Active U.S. Rig Count (Oil & Gas)    585  +4  | 07/12 USD/MXN Mexican Peso   17.7730 (data live)  | 07/12 EUR/USD  1.0869 (data live)  | 07/12 US/Bs. (Bolivar)   $36.53030000 (data BCV)

IEA cuts 2023 oil demand growth estimate on economic concerns, Russia crisis – Platts


Nick Coleman, Platts

EnergiesNet.com 11 16 2022

The International Energy Agency on Nov. 15 lowered its global oil demand growth estimate for 2023 to 1.6 million b/d from 1.7 million b/d citing mounting economic concerns and Europe’s energy crisis, adding that a proposed price cap on Russian oil still faced “myriad” uncertainties

In its monthly oil market report, the IEA noted an array of “headwinds” and a particularly tight diesel market. “China’s persistently weak economy, Europe’s energy crisis, burgeoning product cracks and the strong US dollar are all weighing heavily on [oil] consumption,” the IEA said.

Approaching EU embargoes on Russian oil and a ban on maritime services “will add further pressure on global oil balances, and, in particular, on already exceptionally tight diesel markets,” the IEA added, noting also the impact of recent French refinery strikes.

The IEA did, however, highlight potential relief as new, non-OECD refining capacity comes on stream in China, Kuwait, Mexico and Nigeria, offsetting closures in Europe. It estimated a net 2.7 million b/d of new capacity would be added between Q4 2022 and the end of 2023. “Increased refinery capacity will eventually help ease diesel tensions. However, until then, if prices go too high, further demand destruction may be inevitable,” the IEA said.

The IEA raised its full-year oil demand growth estimate for 2022 from 1.9 million b/d to 2.1 million b/d, but reiterated expectations for a year-on-year contraction in Q4 2022, estimating the reduction at 240,000 b/d.

“High diesel prices are fueling inflation, adding pressure on the global economy and world oil demand,” the IEA said, warning of likely additional demand destruction.

Earlier, OPEC lowered its own oil demand growth estimates for both 2022 and 2023 in its monthly oil market report published Nov. 14. Analysts at S&P Global Commodity Insights expect quicker growth than foreseen by the IEA, but slower growth than forecast by OPEC, with 2022 demand rising 2.3 million b/d and 2023 demand by 2 million b/d.

The IEA went on to note a reduction in OECD oil stocks in September, including a depletion of government “strategic” stocks. Total OECD stocks fell below 4 billion barrels for the first time since 2004, with public stocks drawn in the US, Japan, South Korea and Europe, it said. OECD industry stocks stood at 2.7 billion barrels in September, some 237 million barrels below the five-year average, it added.

Russia impact

On Russia, the IEA said the country’s exports had risen 165,000 b/d on the month to 7.7 million b/d in October, with reduced shipments to Turkey more than offset by shipments to “yet to be identified destinations.” Russian oil export revenues rose $1.7 billion on the month to $17.3 billion for October, it estimated.

However, the IEA voiced doubts about Russia’s ability to redirect all the exports the EU intends to renounce under an impending embargo in response to the invasion of Ukraine.

Russia’s crude exports to the EU dropped by around 1 million b/d from the average January-February level to October, when its crude exports to the EU amounted to 1.5 million b/d, the IEA said.

Under planned EU measures banning most Russian crude imports by Dec. 5, “Russia will need to redirect another 1.1 million b/d of crude oil exports elsewhere,” it said.

The IEA added “myriad” uncertainties remained over a proposed Russian oil price cap. Among the questions still to be resolved over the redirection of Russian oil is a shortage of ice-class vessels for export from the Baltic, it said.

“For crude oil, no significant buying from Russia outside China, India, and Turkey has appeared, despite massive discounts. A further rerouting of trade should help ease pressure, but a shortage of tankers is a major concern, especially for ice-class vessels required to load out of the Baltic ports during winter,” the IEA said.

spglobal.com 11 16 2022

Share this news

Support EnergiesNet.com

By Elio Ohep · Launched in 1999 under Petroleumworld.com

Information & News on Latin America’s Energy, Oil, Gas, Renewables, Climate, Technology, Politics and Social issues

Contact : editor@petroleuworld.com

CopyRight©1999-2021, EnergiesNet.com™  / Elio Ohep – All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission fromPetroleumworld or the copyright owner of the material.

Scroll to Top