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Demand rises, but crude oil prices fall

Updated: Nov 30, 2023

The impact of OPEC's voluntary cuts, the closure of wells in Alberta Canada due to forest fires, the stoppage of oil production in the Iraqi Kurdistan region, are latent in the crude market, however, this has not caused an increase in prices or triggered a visible decrease in inventories.

Due to these and other factors, the EIA published yesterday that it modified its STEO (Short-Term Energy Outlook) because between April 12 and May 4, 2023, Brent fell $16 per barrel, $73/b, while that West Texas Intermediate crude fell $15/b to $69/, and this leads to changes in its forecast for both prices and production.

The Energy Information Administration of the US (EIA) expects a drop in OPEC production and growth in demand to lead to relatively moderate price increases in the coming months.

This May report forecasts OPEC's total liquid fuel production to decline from 34.0 million barrels per day (b/d) in April to an average of 33.7 million b/d for the remainder of 2023.

And by 2024, increase 0.7 million b/d to 34.4 million b/d, buoyed by the end of agreed OPEC+ production cuts in 2023.

Increases in the demand for crude oil

The International Energy Agency (IEA) presented its OMR (Oil Market Report) in which it forecasts the growth of world oil demand for 2023, establishing an average of 102 mb/d, 1.3 mb/d more than in 2019.

This is largely due to the rebound in China (the world's second-largest oil user after the US), which will account for nearly 60% of global growth by 2023.

Record demand in China, India and the Middle East at the start of the year more than offset lackluster industrial activity and oil use in the OECD. The latter accounts for just 15% of growth this year, supported by consumer spending and personal mobility. Overall, world oil demand is set to average 102 mb/d in 2023, 1.3 mb/d more than 2019, the IEA published in its report.

By 2023, world oil supply will expand by 1.2 mb/d, led by the United States and Brazil.

Global crude production reaches an estimated 82.3 mb/d in 2023 as 1Q23 record runs in Asia led to an upward adjustment of 300 mb/d compared to last month's Report, all in the IEA report.

Supply and demand  of crude oil
Crude oil

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