- Oil climbs back above $70/Bbl ahead of the Fed’s June meeting
- July ’23 WTI gained 77c this morning to trade around $70/Bbl
- Markets await today's interest rate decision from the Fed, with expectations of a pause in rate hikes that could potentially buoy energy demand
- Prices are supported by a slowdown in U.S. inflation and China's initiatives to revive its underperforming economy
- Additionally, the IEA raised its oil demand growth forecast for 2023 by 0.2 MMBbl/d to 2.4 MMBbl/d, bringing the total to 102.3 MMBbl/d
- China's Oil Quota Hike Fuels Demand Optimism (Bloomberg)
- China allocated a significant crude-import quota of 62.28 million tons in its third batch in 2023, signaling an uptick surge in oil demand
- The total quota for the year has reached 194 million tons, marking an 18% increase compared to the same period in 2022, when the pandemic suppressed demand
- Despite a slower economic recovery in China, the country's oil consumption could see a boost, further supported by the expansion of its processing capacity with new independent refineries
- IEA Foresees Tightening Oil Market Ahead of Global Energy Transition (Bloomberg)
- The IEA, in its monthly report, said that the oil market would tighten in the next few months due to China's post-pandemic fuel consumption surge and OPEC+ production cuts
- The agency added that global oil inventories are set to fall in 2024 even as global demand growth is expected to drop to 0.86 MMBbl/ from 2.4 MMBbl/d in 2023
- Looking ahead, the IEA sees a global reduction in hydrocarbon use and a balanced oil market by 2028, driven by lower fuel consumption and a shift toward electric vehicles