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OPEC+ continues to work to balance oil markets, cautiously eyeing China growth, the UAE Minister of Energy told a conference just two days ahead of the alliance’s October 4 ministerial panel meeting.
"Many dynamics are moving on and we hope that the growth in China picks up ... because the whole world economy is dependent on China," UAE Minister of Energy and Infrastructure Al Mazrouei told the Adipec conference.
"My worry is not an undersupplied market in the short term. My worry is an undersupplied market in the longer and mid term,” the minister said, as reported by The National News.
The comments come as the World Bank cuts growth estimates for China, the world’s second-largest economy and biggest importer of crude oil. On Monday, the World Bank forecast growth in China at 5.1% for this year, which is well above the 3% in 2022. However, that growth pace has slowed since April due to what the World Bank described in its October economic update as “subdued domestic demand and persistent difficulties in the real estate sector”.
The concern, shared by OPEC+, is that slower Chinese GDP growth could reduce demand for crude oil.
The World Bank also cut its 2024 China GDP growth projection to 4.4% from 4.8%.
On Sunday, the Caixin/S&P PMI (manufacturing purchasing managers’ index) showed September PMI falling to 50.6, down from 51.0 in August, with the 50.0 mark being the mid-point between growth and contraction.
In its next ministerial panel meeting on October 4, market watchers are waiting to see whether Saudi Arabia and Russia will make any changes to their current voluntary output cuts of 1.3 million barrels per day.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com