Global oil demand likely to hit record this year as China reopens, IEA says (NYSEARCA:USO)

China’s swift reopening from COVID-19 constraints probably will propel global oil desire to a new report superior in 2023, while rate cap sanctions on Russia could limit provide, the Worldwide Strength Agency described Wednesday.

In its regular Oil Market Report, the IEA elevated its forecast for oil need progress this yr by practically 200K bbl/working day to 1.9M bbl/day, which would lift need to an all-time record of 101.7M bbl/working day.

Although raising its forecast for Chinese demand from customers by 100K barrels to 15.9M bbl/day, the IEA cautioned China’s reopening might be “bumpy and drawn-out,” noting “huge underreporting” of COVID-19 circumstances and a weak financial state.

Front-month Nymex crude oil (CL1:COM) closed -.8% on Wednesday to $79.48/bbl, snapping an 8-session successful streak, while Brent. crude (CO1:COM) settled -1.1% to $84.98/bbl.

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“The nicely-supplied oil balance at the start of 2023 could immediately tighten,” the IEA said in its report.

Several oil current market observers concur, with Goldman Sachs expecting a “bullish concoction” for commodities and hedge fund manager Pierre Andurand forecasting crude oil rising to as higher as $140/bbl.