Oil Prices Surge due to an Increasing Demand

On Thursday, the Organization of the Petroleum Exporting Countries, including Russia (OPEC+) said global oil demand would rise this summer.

West Texas Intermediate crude oil futures for May delivery rose by 0.43% to $82.51 per barrel on April 14. Likewise, Brent contracts for June shipment increased by 0.33% to $86.37 per barrel.

As said by OPEC+ in the summer oil market outlook, its demand worldwide is bound to go up. It would jump by 2.50% in 2023’s second and third quarters, higher than last year’s period.

Moreover, it is above the expected 2.10% year-on-year surge in this year’s first quarter. The organization projected the call for supply to hit 101.60 million barrels a day. In the third quarter, it estimated a boost of 480,000 barrels a day, exceeding 102 million.

Also, US oil prices already went up in recent weeks. On the other hand, several countries have storage limitations, although American refineries heighten average summer production.

In addition, OPEC+ said that the coming driving season in the US could provide additional demand for fuels. Good economic behavior will contribute to the increasing demand for oil. However, any headwinds the economy faces, and ongoing monetary issues by the Federal Reserve may affect prices.

Chinese Oil Demand Grows according to OPEC+

On April 13, OPEC+ reported that the demand for oil in China would increase to 760,000 barrels per day (bpd). As a result, it slightly raised the order growth outlook for the Asian country.

This 2023, its request for oil is anticipated to average 15.61 million bpd, up by 760,000 bpd YoY. The recent estimated increase is more significant than the 710,000-bpd growth in the previous month’s report.

Furthermore, China has witnessed a recovery in oil consumption since it left the zero-COVID policy last year. Besides, the world’s major crude importer will lead fuel usage growth in emerging markets, as said by OPEC+.

It added that demand for most products has been impressive since lifting the country’s restrictive pandemic policy.