Opec still sees robust oil demand growth next year despite global economic headwinds, its secretary general Haitham al-Ghais said today at the Argus European Crude Conference.
"We still see a healthy global economy, growing despite all the challenges, inflationary pressures and actions taken by central bankers all over the world to tame inflation," he said.
Al-Ghais reiterated Opec's projection that oil demand would grow by 2.4mn b/d this year and by 2.2mn b/d in 2024. By contrast, the IEA sees much lower oil demand growth next year at 880,000 b/d.
While acknowledging China's economic challenges, al-Ghais said the country's economy was still projected to grow by around 4-5pc. Although this is somewhat lower than China's recent historic growth rate, it remains high compared with developed economies.
The IMF today revised up its growth forecast for China by 0.4 percentage points to 5.4pc this year and by 0.4 percentage points to 4.6pc for 2024, on the back of stronger policy support by Beijing.
Speaking at the Argus event, Standard Chartered's head of commodities Paul Horsnell said China's oil demand growth would slow from more than 800,000 b/d this year to around 630,000 b/d in 2024. He attributed this to the government's abandonment of a "pure growth maximisation model," and said Beijing was comfortable with current rates of economic growth.
Trading firm Trafigura's chief economist Saad Rahim noted that China's real estate sector "keeps chugging along".
"I think so many participants in the market are ready to go commodities equals China, China equals property, therefore if Chinese property is weak there's no way commodities demand in China can be strong," he said. "Then you look at the numbers. Record copper demand in China this year, record aluminium demand and record oil demand."
Trading firm Gunvor's head of research Frederic Lassare said oil demand growth this year was largely driven by China's post-pandemic reopening and recovering jet fuel demand. While growth would be lower at around 1.6mn-1.7mn b/d, this was still "quite decent," he said.
But al-Ghais cautioned against focusing too heavily on China and pointed to India and other parts of Asia-Pacific where there was "much more robust and positive news" in terms of economic growth. He said jet fuel demand still had room to grow in China, other Asia and the US.
Gunvor's Lassare said he expected oil market volatility to remain quite high in 2024, and said geopolitical risks would continue to play an important role. He highlighted a series of upcoming elections, including in the US, Russia, Venezuela and Taiwan, which could have an effect on regulations and taxes that "should have an impact on the oil market."
