The prices of Petroleum they fall as much as 1% as the market assesses the prospect of a tight supply in the face of a possible economic recession in the United States, the world’s largest oil consumer.
Brent oil falls 0.40% to $86.98 a barrel for June 2023 contracts. Meanwhile, West Texas Intermediate in the United States (WTI) yields $28 to $83.
Both Brent and WTI gained 2% yesterday, hitting their highest level in more than a month, as cooling US inflation raised hopes that the Federal Reserve would stop raising interest rates.
However, minutes from the Fed’s latest policy meeting indicated that banking sector strains could push the economy into recession, weakening demand for US oil.
Today, The Organization of the Petroleum Exporting Countries (OPEC) stated in a monthly report the downward risks for oil demand in the boreal summer. However, it kept its forecast for global oil demand growth in 2023 unchanged.
However, the group revised slightly upward the demand for oil from countries outside the Organization for Economic Cooperation and Development (OECD), where it should increase 2.2 million barrels per day (mbd) in 2023, compared to the increase of 2.1 million mbd that it had forecast in March, mainly due to the impulse of China and India.
This slight adjustment is explained by a “greater than expected improvement in economic activity in China, after the abandonment of its zero covid policy, and due to the new improvements expected in the Middle East, Latin America and other European countries” non-OECD members.
Instead, OECD demand has been revised downwards and will only increase by just over 0.1 mbd (versus the 0.2 mbd increase expected in March for 2023) on average over last year, taking into account a ” anticipated decline in economic activity” in the countries of America and Europe belonging to the OECD.
Global oil demand should reach, on average, 101.9 mbd in 2023, a record, despite uncertain economic prospects, said OPEC, which reviews its supply and demand forecasts every month.
Total world demand for oil stood at 99.6 mbd in 2022, on average, according to OPEC’s latest assessments, which remained virtually unchanged from the organization’s latest report, released in mid-March.
Source: Ambito
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