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Rising demand in China and the United States sent global oil demand surging by 3 million barrels per day (bpd) in March compared to February and hitting the highest level on record, data from the Joint Organizations Data Initiative (JODI) showed on Thursday.
Total product demand in China jumped by 1.6 million bpd month-on-month to 16.79 million bpd in March, showed the JODI data shared by the Riyadh-based International Energy Forum (IEF). The estimated Chinese demand was the third-highest level ever reported for the country in JODI.
China’s crude imports also jumped by 1.37 million bpd to 12.35 million bpd, according to the data.
In the United States, total product demand rose to 21.77 million bpd, up by 1.77 million bpd month-on-month.
However, U.S. crude oil production declined by 257,000 bpd to 12.22 million bpd in March, but this was up by 525,000 bpd compared to year-ago levels.
While global oil demand hit a record, global crude oil production dropped by 500,000 bpd, due to declines in the U.S., China, Angola, Canada, and the UK, according to the JODI data, which compiles self-reported figures from the countries.
Global oil inventories also dropped in March, pointing to a tightening market ahead.
Global inventories of refined products fell by 39.6 million barrels in March, while crude oil stocks dropped by 700,000 barrels. Overall crude and product inventories remain 336 million barrels below the five-year average, per the JODI data.
Earlier this week, the International Energy Agency (IEA) also noted a record-high oil consumption in China in March, which prompted the agency to revise up its global oil demand outlook for 2023. The world’s oil demand is set to rise by 2.2 million bpd this year to a record 102 million bpd, mostly driven by China, according to the IEA.
The current pessimistic mood on the market, due to macroeconomic concerns, clashes with expectations of a tight market later this year, when demand is set to outstrip supply by almost 2 million bpd, the agency added.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.