OPEC MOMR (Jan): 2023 World oil demand growth revised +100k BPD from the prior month; OPEC-13 production dipped M/M in January

DEMAND

• World oil demand growth for 2023 revised up by 100k BPD at 2.3mln BPD (prev. 2.2mln BPD), with the OECD growing by 0.4mln BPD (prev. 0.3mln BPD and non-OECD at 2.0mln BPD (prev. 1.9mln BPD).


• Demand for OPEC crude in 2023 is revised up by 0.2mln BPD from the previous assessment to stand at 29.4mln BPD, which is 0.8mln BPD higher than in 2022.


• Globally, in terms of products, transportation fuels are expected to be the main drivers for oil demand. Consumption of both gasoline and diesel is forecast to increase by around 1.1mln BPD Y/Y, well above pre-pandemic levels and supported by expected continued growth in mobility amid an ongoing rebound in the services sector.


• Key to oil demand growth in 2023 will be the return of China from its mandated mobility restrictions and the effect this will have on the country, the region and the world.

SUPPLY

• Preliminary data indicates that January’s global oil supply increased by 0.6mln BPD M/M to average 101.7mln BPD, up by 3.3mln BPD Y/Y.


• According to secondary sources, total OPEC-13 crude oil production averaged 28.88mln BPD in January 2023 (prev. 28.97mln BPD in the last report), lower by 49k M/M. Crude oil output increased mainly in Nigeria, Angola and Kuwait, while production in Saudi Arabia, Iraq and Iran declined.


• The share of OPEC crude oil in total global production decreased by 0.2ppts to 28.4% in January, compared with the previous month.

REFINERY MARGINS

• In January, refinery margins reversed trend and strengthened substantially in all main trading hubs, with sizeable margin gains registered, particularly in the Atlantic Basin, vastly backed by a solid recovery in gasoline performance.


• In Europe, firm gasoline exports to the US, amid stronger product buying interest in Europe ahead of the 5 February sanctions on Russian products, led to a stronger product market, particularly for those linked to the top section of the barrel.


• Meanwhile, in Asia, the recent lifting of COVID-19 restrictions in China and an improvement in transport activity around the Chinese Lunar New Year holidays, boosted petrochemical activities and unplanned refinery outages in the country, contributing significant support to Asian naphtha and gasoline markets, despite recorded losses at the bottom of the barrel.

Analysis details (13:14)

• The report chimes with the EIA STEO last week which upped its 2023 demand growth forecast by 60k BPD, however, the release encapsulate a period before the Western sanctions on Russia came into effect on February 5th, before Russia announced a 500k BPD cut to its oil production on February 10th, and before the US announced another SPR release on February 13th, thus the release is likely stale.

14 Feb 2023 - 13:14- EnergyGeopolitical- Source: OPEC