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Charles Kennedy

Charles Kennedy

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Oil Prices Under Pressure As Standard Chartered Lowers Global Demand Forecast

  • Standard Chartered has lowered its global oil demand outlook for next year, suggesting that oil demand won’t break the all-time highs of 2019.
  • The decision by OPEC+ to cut its production target by 2 million bpd appears to have been a key factor in Standard Chartered lowering its oil demand outlook.
  • Standard Chartered is particularly bearish about oil demand in China and the U.S. due to fears of a recession and of continued Covid problems in China.
Oil demand

Standard Chartered says it no longer expects next year’s global oil demand to surpass the all-time highs of 2019 and has downgraded its demand growth forecast along with its U.S. GDP forecast. 


In the aftermath of the OPEC+ decision to cut output by 2 million barrels per day in November, Standard Chartered has revised its oil market balances, forecasting 2023 oil demand growth at 1.26 million barrels per day, which represents a reduction of 900,000 bpd from the beginning of this year. 

Standard Chartered’s model “implies” that global oil demand will fall 0.2 mb/d short. 

“All three of the main oil balance forecasting agencies are due to publish their October reports this week and we expect them to reduce their 2023 demand growth forecasts,” Stan Chart writes in its latest report.

“The highest current 2023 growth forecast is the OPEC Secretariat’s 2.7 mb/d, which exceeds our forecast by 1.44 mb/d mainly due to significantly higher demand estimates for Russia, North America, China and the Middle East,” the report noted, adding that the International Energy Agency (IEA) forecasts 2.12 m/bd in demand growth, compared with the Energy Information Administration’s 1.97 mb/d forecast.

What differs in Stan Chart’s forecast concerns demand growth projections in China and the United States, primarily. Stan Chart’s forecast for Chinese oil demand growth is only around half of the IEA’s forecast. The IEA forecasts Chinese oil demand growth at 970,000 b/d, while Stan Chart estimates only 529,000 b/d. 

For the United States, Stan Chart forecasts 85,000 b/d in oil demand growth, while the EIA’s forecast is a much more optimistic 348,000 b/d. 

Analysts for Standard Chartered foresee only a “gradual loosening of China’s coronavirus restrictions”, skewing oil demand growth lower. At the same time, it is concerned about recession and a contraction in U.S. GDP. 

Overall, the analysts think “this week’s oil balance reports are likely to turn market attention back towards a weakening demand outlook”. 


By Charles Kennedy for Oilprice.com

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  • Mike Lewicki on October 12 2022 said:
    standard chartered has been wrong on everything to date.

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