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Oil Demand to Hit Record Level This Year as China Reopens, IEA Says

China reopening sends oil prices sky-high! 

Oil prices gained Wednesday, after the International Energy Agency said China’s reopening would send demand soaring.

Tweet on Oil prices by WSJ

Oil price fluctuations reported by WSJ

China’s rapid shift to reopen its economy following lengthy Covid-19 lockdowns should help oil demand rise to a record level this year, the International Energy Agency said.

The energy watchdog lifted its forecast for oil demand growth this year by nearly 200,000 barrels a day to 1.9 million barrels a day. The extra demand means that the IEA now expects total oil demand this year to average 101.7 million barrels a day, well above pre-Covid levels and a record amount.

Beijing’s rapid pivot away from its zero-tolerance approach to Covid cases has largely taken the oil market by surprise and boosted predictions that China’s reopening could swiftly herald a rebound in the nation’s oil demand.

Front-month Brent futures recently stood 1.7% higher at $87.39 a barrel, putting the international crude benchmark on track for its highest close since Nov. 22.

The equivalent contract for the U.S. marker, West Texas Intermediate, was on course for its highest settlement since mid-November, trading 2% higher on the day at $81.81 a barrel.

The IEA forecast global oil demand will hit 101.7 million barrels a day in 2023, topping the 2019 record of 100.5 million a day.


Image:Oil facility