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Oil Demand Jumped By 3 Million Bpd In May To Near-Record Levels

The world’s oil demand jumped by more than 3 million barrels per day (bpd) in May compared to April, nearing the record demand level seen in March this year, the latest data by the Joint Organizations Data Initiative (JODI) showed on Monday.  

The increase in global oil demand was largely driven by a demand surge in China, as well as increases in India, Saudi Arabia, and the United States. China’s total oil product demand hit 17.37 million bpd in May, the JODI data showed. This was an increase of 1.7 million bpd compared to April, and the second-highest level ever reported in JODI.

Other Chinese oil data also pointed to strong demand—crude oil imports jumped by 1.8 million bpd to 12.15 million bpd in May, while refinery intake surged by 1.81 million bpd to 16.38 million bpd, according to the data.

Despite resilient Chinese oil demand, the market has been focused on weaker macroeconomic data from the world’s top crude oil importer, which has weighed on sentiment. For example, early on Monday, an underwhelming second-quarter GDP reading from China sent oil prices lower by more than 1%.

While global demand rose in May, crude oil production dropped by 800,000 bpd due to lower output in Saudi Arabia, which began a 500,000-bpd cut as part of a 1.6-million-bpd collective reduction with other OPEC+ producers.

Production in the United States also dropped, as did output in Canada, due to the wildfires in May, which forced operators to shut down some producing operations as a precautionary measure.

Canada’s crude oil production fell by 197,000 bpd in May and hit a 27-month low, JODI’s data showed.

Globally, crude inventories in JODI-reporting countries fell by 10 million barrels and stood at 324 million barrels below the five-year average. But product inventories rose by 32 million barrels and stood 25 million barrels below the five-year average, according to the data.

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By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on July 17 2023 said:
    This is a record growth which is even higher by 25% than OPEC+’s latest projection of 2.4 million barrels a day (mbd) for 2023. This was mainly driven by China whose oil demand broke all previous records at 17.37 mbd in May this year and accounted for 57% of the global demand growth and also India and Saudi Arabia. Moreover, China’s crude imports in May hit 12.15 mbd, another new record.

    And yet the author describes China’s economic growth of 6.3% in May as disappointing when it is higher than both the World Bank’s and the IMF’s projection of 5.2%-6.5% and is also 5 and 8 times higher that the United States’ economy and the EU’s respectively.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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