Chinese oil demand optimism countered by weak economic data

The front-month ICE Brent contract has inched lower by $0.46/bbl on the day, to $74.89/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

Chinese oil demand is projected to surpass previous expectations and this has prompted the International Energy Agency (IEA) to raise its global oil demand forecast by 200,000 b/d for 2023. The IEA now expects global oil demand to rise by 2.2 million b/d this year and average 102 million b/d.

Meanwhile,global oil demand is expected to exceed supply by almost 2 million b/d this year, which could tighten the market in the second half of the year, according to the IEA.

Downward pressure:

Commercial US crude inventories saw a build of 3.7 million bbls in the week that ended 12 May, according to an American Petroleum Institute (API) estimate. Official weekly data from the Energy Information Administration (EIA) is scheduled for release later today.

A gloomy global macroeconomic outlook, says senior analyst at OANDA Ed Moya, pointing weaker economic data released from the US and China as a near-term concern.

"Crude prices remain heavy as energy traders just can't shake off global demand concerns. It doesn't matter how upbeat everyone is for China's second half of the year, the current situation is too disappointing," he has said.

By Konica Bhatt

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