OPEC MOMR (Jun): Demand forecasts unchanged M/M; OPEC May production decreased with output from Saudi, UAE, and Kuwait declining

DEMAND

• 2023 world oil demand growth is broadly unchanged from the last month’s assessment at 2.3mln BPD.


• Demand forecasts for China, Latin America, and the Middle East have been revised up slightly, while OECD Europe, Other Asia and Africa have been adjusted slightly lower.


• Demand for OPEC crude in 2023 also remains unchanged from the previous assessment.

SUPPLY

• Preliminary data indicate that May’s global oil supply decreased by 1.0mln BPD M/M (vs -0.5mln BPD M/M in April) to average 100.2mln BOD (prev. 101.3mln BPD), up by 1.7mln BPD Y/Y.


• OPEC-13 crude oil production in May decreased by 464k BPD M/M ( vs prev -191k BPD M/M), according to available secondary sources.


• Crude oil output increased mainly in Nigeria, IR Iran and Angola, while production in Saudi Arabia, the UAE and Kuwait declined.


• The share of OPEC crude oil in total global production fell 2ppt to stand at 28% in May (prev. 28.2% in April), compared with the previous month.

CHINA

• China’s crude imports fell sharply in April from the previous month’s high levels to average 10.3mln BPD, Preliminary customs data for May show crude imports averaging 12.2mln BPD /d.


• China's oil demand to rise by 840k BPD in 2023 (vs prev. 800k BPD).

WORLD

• World economic growth is estimated at 3.3% for 2022 and forecast at 2.6% for 2023, both unchanged from the previous month’s assessment.


• The US economic growth forecast for 2023 is revised up by 0.1% to stand at 1.3%, following a growth of 2.1% for 2022.


• The Eurozone’s economic growth forecast for 2023 remains at 0.8%, following a growth of 3.5% for 2022.


• China’s economic growth forecast remains at 5.2% for 2023, following a growth of 3.0% for 2022.


• India’s 2022 economic growth estimate is unchanged at 6.7%, and the forecast for 2023 remains at 5.6%.

OIL PRICE MOVEMENT

• “Crude oil futures prices extended their losses in May experiencing a heavy selloff. Market sentiment weakened due to renewed worries about an economic slowdown and re-emerging US banking sector concerns. Investor sentiment also came under additional pressure after the US Federal Reserve increased its key interest rate again. Selloffs from hedge funds and other money managers cut net long positions by about 120mln barrels, fuelling the price decline.”

PRODUCT MARKET

Analysis details (12:20)

• Overall, the release is backwards looking and does not encompass the latest OPEC+ meeting which saw voluntary production cuts extended, UAE’s baseline raised, and Saudi announcing a deeper voluntary cut.


• Furthermore, the report comes before the latest round of stimulus flagged for China, whereby the PBoC cut the short-term interbank funding rate cut overnight, whilst recent sources suggested several measures being mulled by officials to bolster the Chinese economy.

13 Jun 2023 - 12:20- EnergyData- Source: OPEC