Global Oil Demand Set to Hit Record: IEA

World oil demand will climb by 2 million barrels per day (bpd) in 2023 to a record 101.9 million bpd, according to the IEA Oil Market Report (OMR) for April. The IEA report stated that the extra cuts by OPEC+ will push world oil supply down 400 kb/d by end-2023. From March-December, gains of 1 million bpd from non- OPEC+ fail to offset a 1.4 million bpd decline from the producer bloc. For the year as a whole, global oil production growth slows to 1.2 million bpd versus 4.6 million bpd in 2022. Non-OPEC+, led by the US and Brazil, drives the 2023, it added.

"Reflecting the widening disparity between regions, non-OECD countries, buoyed by a resurgent China, will account for 90% of growth,'' stated the OMR. "OECD demand, dragged down by weak industrial activity and warm weather, contracted by 390 kb/d y-o-y in 1Q23, its second consecutive quarter of decline. Jet/kerosene accounts for 57% of 2023 gains," it added.

Global refining throughput is forecast to average 82 million bpd this year, 0.1 million bpd lower than in last month's report due to weaker Q1 data. As per the report, the annual gains will double to 2.1 million bpd from Q1 to Q2, as runs in the US normalize and with Chinese activity materially higher than a weak Q2 2022 baseline. On average, 2023 crude runs will approach pre-covid levels but remain 0.3 million b/d below 2019 average throughputs.

According to IEA, global inventories held largely steady in February after surging by 58 million barrels in the previous month. Oil on water and non-OECD stocks fell by 11.5 and 2.1 million barrels respectively, while total OECD inventories rose by 8.8 million barrels. OECD commercial stocks built by 9.6 million barrel, narrowing the deficit against the five-year average to 7.5 million barrel. Preliminary data for the US, Europe and Japan show a hefty 38.9 million barrel decline in March, it added.